City of Rocky River, Ohio · Michael A. Thomas Director of Finance . ... Ciuni & Panichi, Inc....

City of Rocky River, Ohio

Comprehensive Annual Financial Report

For the Year Ended December 31, 2010

Issued by:

City of Rocky River Department of Finance

Michael A. Thomas Director of Finance

88 East Broad Street, Fifth Floor, Columbus, Ohio 43215‐3506 Phone: 614‐466‐4514 or 800‐282‐0370 Fax: 614‐466‐4490

www. auditor.state.oh.us

City Council City of Rocky River 21012 Hilliard Blvd. Rocky River, Ohio 44116 We have reviewed the Independent Auditors’ Report of the City of Rocky River, Cuyahoga County, prepared by Ciuni & Panichi, Inc., for the audit period January 1, 2010 through December 31, 2010. Based upon this review, we have accepted these reports in lieu of the audit required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them. Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State, regulations and grant requirements. The City of Rocky River is responsible for compliance with these laws and regulations. Dave Yost Auditor of State August 30, 2011

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City of Rocky River, Ohio Comprehensive Annual Financial Report For The Year Ended December 31, 2010 Table of Contents Page

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I. Introductory Section

Title Page .............................................................................................................................................. i Table of Contents .................................................................................................................................. ii Letter of Transmittal ............................................................................................................................. viii GFOA Certificate of Achievement ....................................................................................................... xiii List of Elected Officials ........................................................................................................................ xiv Organizational Chart ............................................................................................................................. xv II. Financial Section

Independent Auditors’ Report............................................................................................................... 1 Management’s Discussion and Analysis............................................................................................... 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets .............................................................................................................. 15 Statement of Activities ................................................................................................................ 16 Fund Financial Statements: Balance Sheet – Governmental Funds......................................................................................... 18 Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities................................................................................ 20 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds.............................................................................................. 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities...... ............................. 24 Statement of Revenues, Expenditures and Changes in Fund Balances – Budget (Non-GAAP Budgetary Basis) and Actual: General Fund......................................................................................................................... 26 Recreation Center Fund ........................................................................................................ 27 Statement of Fund Net Assets – Proprietary Funds .................................................................... 28 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds ............................................................................................... 29


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II. Financial Section (continued) Statement of Cash Flows – Proprietary Fund Types ................................................................... 30 Statement of Fiduciary Net Assets – Fiduciary Funds ................................................................ 31 Statement of Changes in Fiduciary Net Assets – Investment Trust Fund ................................... 32 Notes to Basic Financial Statements.................................................................................................. 33 Combining Statements and Individual Fund Schedules: Combining Statements: Non-major Governmental Funds: Fund Descriptions........................................................................................................................ 66 Combining Balance Sheet – Non-major Governmental Funds ................................................... 68 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-major Governmental Funds .................................................................. 69 Combining Balance Sheet – Non-major Special Revenue Funds ............................................... 70 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-major Special Revenue Funds .............................................................. 74 Combining Balance Sheet – Non-major Capital Projects Funds................................................. 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-major Capital Projects Funds ............................................................... 79 Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget (Non-GAAP Budgetary Basis) and Actual: Governmental Major Funds: General Fund .................................................................................................................................. 81 Recreation Center Fund .................................................................................................................. 85 General Obligation Bond Retirement Fund.................................................................................... 86 Sewer Rehabilitation Fund ............................................................................................................. 87 Capital Improvement Fund ............................................................................................................. 88


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II. Financial Section (continued) Governmental Non-Major Funds: Law Enforcement Trust Fund......................................................................................................... 89 Community Diversion Program Fund ............................................................................................ 90 Indigent Driver Alcohol Treatment Fund ....................................................................................... 91 Enforcement and Education Fund .................................................................................................. 92 Municipal Probation Services Fund................................................................................................ 93 Mediation Services Fund ................................................................................................................ 94 Federal Emergency Management Agency Grant Fund................................................................... 95 Office on Aging Fund..................................................................................................................... 96 Marine Patrol Fund......................................................................................................................... 97 Community Impacts Fund .............................................................................................................. 98 Refuse and Recycling Fund ............................................................................................................ 99 Motor Vehicle License Tax Fund ................................................................................................... 100 Street Repair and Maintenance Fund.............................................................................................. 101 State Highway Fund ....................................................................................................................... 102 Indigent Driver Alcohol Monitoring Fund ..................................................................................... 103 Fire Levy Fund ............................................................................................................................... 104 Police Levy Fund............................................................................................................................ 105 Special Assessment Bond Retirement Fund ................................................................................... 106 Equipment Replacement Fund........................................................................................................ 107 Municipal Court Capital Improvement Fund.................................................................................. 108 Proprietary Funds: Sanitary Sewer Fund....................................................................................................................... 109 Self Insurance Fund ........................................................................................................................ 110 Combining Statements – Fiduciary Funds: Fund Descriptions........................................................................................................................ 111 Combining Statement of Assets and Liabilities Agency Funds .......................................................................................................................... 112 Combining Statement of Changes in Assets and Liabilities Agency Funds .......................................................................................................................... 113


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III. Statistical Section

Net Assets by Component – Last Eight Fiscal Years............................................................................ 116 Change in Net Assets – Last Eight Fiscal Years ................................................................................... 117 Fund Balances, Governmental Funds – Last Ten Fiscal Years............................................................. 120 Changes in Fund Balance, Governmental Funds – Last Ten Fiscal Years ........................................... 122 Assessed and Estimated Actual Value of Taxable Property – Last Ten Years ..................................... 124 Property Tax Rates – Direct and Overlapping Governments – (Per $1,000 of Assessed Valuation) – Last Ten Years .............................................................................................. 126 Real Property Tax Levies and Collections – Last Ten Years................................................................ 128 Principal Taxpayers – Real and Tangible Personal Property – As of December 31, 2010 and 2001................................................................................................... 130 Ratio of Outstanding Debt by Type – Last Ten Years .......................................................................... 131 Special Assessment Levies, Collections, and Coverage – Last Ten Years ........................................... 132 Ratio of Net General Bonded Debt to Assessed Value and Net General Bonded Debt Per Capita – Last Ten Years .............................................................................................................. 133 Computation of Legal Debt Margin – Last Ten Years.......................................................................... 134 Computation of Direct and Overlapping General Obligation Bonded Debt ......................................... 135 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total Governmental Expenditures – Last Ten Years .................................................................................. 136 Principal Employers – Current and Nine Years Ago ............................................................................ 137 Demographic Statistics.......................................................................................................................... 138 Property Value and Construction – Last Ten Years.............................................................................. 139


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III. Statistical Section (continued)

Employees by Function/Program – Last Nine Years ............................................................................ 140 Operating Indicators by Function/Program – Last Nine Years ............................................................. 141 Capital Asset Statistics by Function/Program – Last Nine Years ......................................................... 144

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July 7, 2011 Citizens of the City of Rocky River Mayor Pamela E. Bobst; and Members of City Council Transmittal of the Comprehensive Annual Financial Report The City of Rocky River, Ohio (City) is pleased to submit the Comprehensive Annual Financial Report (CAFR) for the year ending December 31, 2010. The CAFR is a more extensive report than basic financial statements and it is believed that the CAFR demonstrates the City's ongoing commitment to be accountable to its citizenry and to excellence in financial reporting. While no single report can be all things to all people, the goal in presenting this CAFR is to provide any person or entity interested in the City with information needed to gain a fair understanding of the City's financial position, results of operations and cash flows. The Ohio Revised Code Section 117.38 requires that the City certify and file, within one hundred fifty days after the close of the fiscal year, a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America. The City issues this CAFR for the year ended December 31, 2010 therefore. The CAFR consists of management’s representations concerning the finances of the City. Consequently management assumes responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive internal control system that has been established for that purpose. To provide a reasonable for making these representations, management of the City has established a thorough internal control framework that is designed to both protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in accordance with GAAP. The City strives to maintain a dynamic system of internal controls and procedures – including internal control over financial reporting – designed to ensure reliable financial record-keeping, transparent financial reporting and disclosure and protection of assets. Because the cost of internal control should not exceed anticipated benefits, the objective of the internal control system is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The City maintains an active Audit Committee to review the audit process; and to report to and make recommendations to City Council. The three Audit Committee members are residents of the City with expertise in financial administration and auditing. The financial statements of the City have been audited by independent auditor Ciuni & Panichi, Inc. The objective of an audit is to provide reasonable assurance that the financial statements are free of material misstatement. The audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates

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made by management; and evaluating the overall financial statement presentation. Based upon the results of the audit, Ciuni & Panichi, Inc. concluded that there was a reasonable basis for rendering an unqualified opinion that the City’s financial statements for the year ended December 31, 2010 are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the Financial Section of the CAFR. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial statements. MD&A complement this Letter of Transmittal and should be read in conjunction with it. Profile of the City of Rocky River, Ohio The City of Rocky River is an established residential community located in northeastern Ohio that covers 4.48 square miles along the southern shore of Lake Erie west of the City of Cleveland, in Cuyahoga County. The Rocky River, which drains into Lake Erie, forms the eastern border of the City. The City’s population according to the 2010 Census was 20,213. The City is a home rule municipal corporation established pursuant to the general laws of the State of Ohio and its own charter. The current charter, which provides for the Mayor/Council form of government, was originally adopted in 1960 and last amended in 2008. The City is governed by a full-time Mayor elected for a two year term; City Council consists of seven elected members who serve two year terms. The Law Director is also an elected office holder who serves two year terms. The Mayor appoints the heads of the following departments: Building, Economic and Community Development, Engineering, Finance, Office on Aging, Recreation and Safety-Service. As of December 31, the City had 190 full-time employees, including the Rocky River Municipal Court. The City provides various services including police and fire protection, including emergency medical services, parks and recreation, senior services, street maintenance, sanitary and storm sewer services, planning and zoning, and general government services. Public health services are provided by contract with the Cuyahoga County Board of Health. Located in the City are the Rocky River Wastewater Treatment Plant and the Rocky River Municipal Court. Both provide services to a jurisdiction that extends to several neighboring communities. In addition to access to services by government entities, City residents may participate in the activities of a variety of local private institutions in the City including the Cleveland Yachting Club; Westwood Country Club; Oakwood Beach; Parklawn Beach; Wagar Beach; Lutheran West High School; Magnificat High School and numerous private elementary schools and churches that contribute to the sense of community in the City. Economic Conditions Local Economy Because of the proximity to major cultural, educational and medical facilities in Northeastern Ohio and ease of travel in the area, the City experiences a degree of economic stability; the City has experienced economic challenges not unlike the northeast Ohio region as a whole. The City’s fiscally responsible approach to economic factors associated with managing a built-out suburb, an understanding of mutual benefits to be derived from intergovernmental cooperation with neighboring communities and its proximity to the City of Cleveland, Ohio economy contribute a degree of economic stability now and for the foreseeable future. The tax base of the City’s municipal income tax consists of business (and employees) located within the City as well as individual, resident taxpayers. The largest organizations located within the City generating income

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tax revenue are the City and the Rocky River City School District. Other significant industries in the City are senior citizen congregate housing and health care; banking; insurance (including health); and retail. Relative to residents’ incomes, the website www.city-data.com reports the estimated median household income in 2009 (the most recent data available) in the City is $60,240; while for the State of Ohio that amount is $45,395. City income tax collections increased by about one percent from 2009. Components of the increase were as follows:

Component 2009 2010 Change Employee Withholding $3,998,910 $4,015,456 $16,546 Business Profit 535,170 573,157 37,987 Residence Tax 3,307,068 3,331,207 24,139 Penalties & Interest 106,301 125,493 19,192

Total $7,947,449 $8,045,313 $97,864 An indicator of the economic strength of a primarily residential community is its property values. As compiled by the website www.city-data.com, the estimated median house/condominium value in 2009 (the most recent data available) was $199,064 in the City and $134,600 statewide. The City has experienced a decline in assessed valuation of real property of about three percent over the last five years. For taxing purposes, Cuyahoga County oversees real property appraisals within the City. Public Utility property saw an overall decrease in value of about 21 percent. Legislation in 2005 enacted by the General Assembly of the State of Ohio eliminated the tangible personal property tax. The total phase out of the tax will be effective January 1, 2009. The legislation provided for the City to be reimbursed for the lost tax revenue on a sliding scale through 2018. Therefore, the tangible personal property value has been eliminated in the tax base. The net revenue affect over the recent five years of these several adjustments, is the City has experienced property tax revenue growth of just under 7 percent; however, there was about a five percent revenue decline compared to 2009. Major Initiatives Management of various phases of significant infrastructure improvement projects was the focus of attention of the City during 2010. The table below updates certain of the projects described in last year’s CAFR.

Project Project Cost Status Construction Schedule Valley View Area Sanitary Sewer $4,979,520 Phase I completed on

schedule; Phase II began in mid-2010

03/01/2009 to 03/30/2011

Elmwood Road Sanitary Sewer $926,417 Project complete 08/15/2009 to 06/15/2010 Hampton Road Sanitary Sewer $5,409,600 Phase I begun on

schedule 04/01/2010 to 11/30/2012

Lake Road Storm and Sanitary Sewer and Road Reconstruction

$4,830,000 Phase I completed on schedule; Phase II began in late 2010

06/01/2010 to 04/30/2011

Interest free loans, that are funded by the Ohio Public Works Commission (OPWC), an agency of the State of Ohio, were obtained for the Valley View Area Sanitary Sewer and Hampton Road Sanitary Sewer projects. Also, to support these projects with a local funding source, in March 2008, the City began

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collection of a fixed fee of $25 per quarter per household imposed in conjunction with sanitary sewer charges. In 2010, the City collected $1,733,336 from this fee. These projects have been determined as those of priority within the comprehensive sewer maintenance and rehabilitation plan drafted by the City Engineer in 2006. The U. S. Route 6 (Lake Road) project came together with a superfecta of funding sources: 1) U. S. Federal Highway Authority (FHWA) funds; 2) State of Ohio Urban Paving funds; 3) Cuyahoga County Community Development Block Grant funds; and 4) City (or local) funds. Phase I, a section of the planned road reconstruction was completed in November 2009. The City paid its portion of the project cost to the Ohio Department of Transportation, which is managing the project, in 2010 to fund Phase II construction. Long-term Financial Planning Through prudent planning, limited borrowing and reserved budgetary increases, the City has been able to manage through a declining revenue environment with limited service reductions or additional working capital borrowing. Carrying forward moderate reserves have served as budget stabilizing force for the most recent several years. The ability to continue to carry forward budgetary reserves will be challenged in the three to five year time frame. The City monitors cash flow in comparison to budget expectations throughout the year and attempts to be in a position to react to unexpected outside influences. Municipal Income Tax revenue accounted for approximately to 45 percent of total General Fund revenue; that amount was 42 percent in 2009 and 40 percent in 2008. Because this revenue source is economically sensitive and has remained relatively flat in recent years, the City’s financial position has continued to be negatively impacted because of a revenue decline first experienced from 2008 to 2009. In 2010, income tax revenue was short of budget expectations by about one percent. Some financial flexibility to provide resources for capital improvement projects, is gained by estate tax receipts (Intergovernmental Revenue); of which collections have ranged from $1.446 to $2.256 million in the most recent five years with an average of $1.963 million per year over that period. Property Tax revenue accounts for approximately to 22 percent of total General Fund revenue; that amount was 22 percent in 2009 and 20 percent in 2008. As of December 2010, the real property component makes up about 83 percent of the City’s Total Tax Valuation. A sexennial property revaluation, last undertaken by the Cuyahoga County Auditor in 2006, on behalf of all taxing districts in Cuyahoga County, resulted in an increase in the Total Tax Valuation of property in the City of approximately 10%. In April 2009, the Cuyahoga County Auditor, based on statistical analysis of sales prices and market conditions within the City, calculated a proposed valuation adjustment of a five percent decrease. However, several projects involving new construction to increase the tax base offset the decrease. The City continues to monitor the effects of the current real estate market on its Total Tax Valuation. The City uses on-going analysis of these and other revenue sources as a basis for its annual budget while balancing the need for reserves. In the most recent five years, the General Fund reserve (non-GAAP budgetary basis) has fallen within a range of 13 percent to 39 percent for an average of about 26 percent. Mutual agreements with other governments to provide services to City residents are always a consideration for any projects undertaken. Currently, income tax collection, wastewater treatment, certain safety services, justice services, park management, air traffic monitoring and marine patrol are provided by contract with other governments or managed by multi-jurisdictional related entities.

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Awards and Acknowledgements Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement of Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the year ending December 31, 2009. This was the twenty-third year that the City has received this prestigious award. A “Certificate of Achievement” is awarded to the City when its publication is issued with easily readable language; is efficiently organized and comprehensive; and conforms to the programs standards for an annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a one year period only. The City believes the current CAFR continues to meet the award program requirements, and will submit it to determine its eligibility for another certificate. Acknowledgements The publication of the CAFR is a significant step in the ongoing effort toward superior financial reporting. City Council’s commitment to excellence of the City in general and support for this project in particular are sincerely appreciated. The City would like to express its appreciation to the firm of Ciuni & Panichi, Inc. for its professional services for assistance with the preparation of the 2010 CAFR. The CAFR represents a coordinated effort among departments of the City; each department takes pride and care managing the assets of the public that are under its control. This report is meant to demonstrate and document such effort. Respectfully submitted, /s/ Michael A. Thomas Michael A. Thomas, CPA Director of Finance

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City of Rocky River, Ohio List of Elected Officials December 31, 2010

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TITLE NAME Mayor Pamela E. Bobst

Law Director Andrew D. Bemer

Council Member – At-Large Dr. James D. Shieda

Council Member – At-Large David W. Furry

Council Member – At-Large Anjanette Arabian-Whitman

Council Member – Ward 1 Thomas J. Hunt

Council Member – Ward 2 James W. Moran

Council Member – Ward 3 Michael W. Mylen

Council President – Ward 4 John B. Shephard

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1

Independent Auditors’ Report Members of the City Council Rocky River, Ohio We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Rocky River, Ohio (the “City”), as of and for the year ended December 31, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2010, and the respective changes in financial position and cash flows where applicable, thereof and the respective budgetary comparison for the General and Recreation Center Funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note 3 to the financial statements, the City implemented Governmental Accounting Standards Board (“GASB”) Statement No. 51, Accounting and Financial Reporting for Intangible Assets, GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, and GASB Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. In accordance with Government Auditing Standards, we have also issued our report dated July 7, 2011 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Members of the City Council Rocky River, Ohio

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The management’s discussion and analysis information on pages 3 through 13 is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.

Cleveland, Ohio July 7, 2011

City of Rocky River, Ohio Management's Discussion and Analysis (Unaudited)


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The administration of the City of Rocky River, Ohio (City) offers this Management’s Discussion and Analysis to provide a narrative overview and analysis of the City's financial activities for the year ended December 31, 2010. The intent of the Management’s Discussion and Analysis is to look at the City's financial performance as a whole; readers should also review the Transmittal Letter and the Basic Financial Statements to enhance their understanding of the City's financial performance. Financial Highlights Key financial highlights for 2010 are:

Total revenues were $30,345,490, a decrease of 2.5 percent from 2009. Total expenses were

$30,662,372, a slight increase over 2009 levels. Because the revenue decline, total net assets decreased $316,882 or 0.5 percent.

Total assets decreased by $1,608,449 or 1.6 percent from 2009.

Total liabilities decreased by $1,291,567 or 3.8 percent from 2009.

Total capital assets increased by $1,169,623 or 1.7 percent from 2009.

Total outstanding long-term liabilities decreased $521,343 from 2009, a decrease of 2.2 percent.

Using This Comprehensive Annual Financial Report The Comprehensive Annual Financial Report (CAFR) consists of a series of financial statements and notes to those statements. These statements are prepared and organized so the reader can understand the City as a financial whole or as an entire operating entity. The financial statements proceed to provide an increasingly detailed look at the City’s specific financial condition. The Statement of Net Assets and Statement of Activities provide information about the activities of the whole City, presenting both an aggregate view of the City's finances and a longer-term view of those assets. Major fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short term as well as what dollars remain for future spending. The fund financial statements also look at the City's most significant funds with all other non-major funds presented in total in one column. Reporting the City of Rocky River as a Whole Statement of Net Assets and Statement of Activities While this document contains information about the funds used by the City to provide services to citizens, the view of the City as a whole looks at all financial transactions and asks the question, "How did the City do financially during 2010?" The Statement of Net Assets and the Statement of Activities answer this question. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting method used by the private sector. The basis of this accounting takes into account all of the current year's revenues and expenses regardless of when the cash is received or paid.



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These two statements report the City’s net assets and changes in them. The City’s net assets, the difference between assets, what the City owns, and liabilities, what the City owes, is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net assets are an indicator of whether its financial health is improving or deteriorating. Also other nonfinancial factors, however, such as changes in the City’s property tax base, income tax base, and the condition of the City’s capital assess (roads, buildings, and water and sewer lines) should be considered to assess the overall health of the City. In the Statement of Net Assets and the Statement of Activities, the City is divided into two kinds of activities:

Governmental activities – Most of the City’s basic services are reported here, including police, fire,

streets, refuse collection, parks, recreation, and general administration. Property taxes, income tax, state shared revenues, court fines, and recreation fees finance most of these activities.

Business-type activities – The City charges a fee to customers to help it cover all or most of the cost of certain services it provides. The City’s sanitary sewer activity is reported here.

The Statement of Net Assets and the Statement of Activities are divided into the following categories: Assets Liabilities Net Assets (Assets minus Liabilities) Program Revenue and Expenses General Revenues Net Assets Beginning of Year and Year's End Reporting the Most Significant Funds of the City of Rocky River Fund Financial Statements The presentation of the City's major funds begins on page 18. Fund financial statements provide detailed information about the City's major funds based on the restrictions on the use of monies. The City has established many funds that account for the multitude of services, facilities and infrastructure provided to City residents. However, these fund financial statements focus on the City's most significant funds. The City’s major funds are the General, Recreation Center, General Obligation Bond Retirement, Sewer Rehabilitation, Capital Improvement and Sanitary Sewer Funds. Government Funds Most of the City's activities are reported in the governmental funds that focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. Governmental funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that are expected to be readily converted to cash. The governmental fund statements provide a detailed short-term view of the City's general operations and the basic services it provides. Government fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future on services provided to residents. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.



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Proprietary Funds The City maintains two different types of proprietary funds. The first, enterprise funds are used to report the same functions presented as business-type activities. The City uses an enterprise fund to account for the operations of its sanitary sewer charges. The second, internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City maintains this type of fund to account for health, prescription, and dental related employee benefits. Because this activity predominantly affects governmental rather than business functions, it has been included within the governmental activities in the government-wide financial statements. Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. The basic proprietary fund financial statements can be found beginning on page 28 of this report. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the City’s administrative oversight. Fiduciary funds are not reflected in the government-wide financial statements because the resources are not available to support the City’s own programs. The City has an Investment Trust Fund and agency funds to report within the fiduciary fund category. Agency funds are reported on a full accrual basis and only present statements of assets and liabilities. Notes to the Financial Statements The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found starting on page 33 of this report. The City of Rocky River as a Whole The Statement of Net Assets looks at the City as a whole. Table 1 provides a summary of the City's net assets for 2010 compared to restated 2009 balances.



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Table 1 Net Assets

Governmental Activities Business-Type Activities Total 2010 2009 2010 2009 2010 2009 Assets Current and Other Assets $ 23,083,636 $ 25,669,799 $ 6,614,655 $ 6,806,564 $ 29,698,291 $ 32,476,363 Capital Assets, Net 49,990,981 49,950,278 19,160,510 18,031,590 69,151,491 67,981,868 Total Assets 73,074,617 75,620,077 25,775,165 24,838,154 98,849,782 100,458,231 Liabilities Current and Other Liabilities 8,700,161 9,711,230 310,027 69,182 9,010,188 9,780,412 Long-Term Liabilities Due Within One Year 1,706,241 1,635,799 35,431 32,574 1,741,672 1,668,373 Due In More Than One Year 21,211,793 21,796,889 306,944 316,490 21,518,737 22,113,379 Total Liabilities 31,618,195 33,143,918 652,402 418,246 32,270,597 33,562,164 Net Assets Invested in Capital Assets Net of Related Debt 31,781,713 31,254,205 18,945,660 17,800,190 50,727,373 49,054,395 Restricted for: Capital Projects 6,304,738 6,208,401 0 0 6,304,738 6,208,401 Debt Service 129,556 295,558 0 0 129,556 295,558 Municipal Probation 387,247 421,063 0 0 387,247 421,063 Aging 51,446 124,001 0 0 51,446 124,001 Street Construction and Maintenance 414,993 406,063 0 0 414,993 406,063 Other Purposes 224,268 539,121 0 0 224,268 539,121 Unrestricted 2,162,461 3,227,747 6,177,103 6,619,718 8,339,564 9,847,465 Total Net Assets $ 41,456,422 $ 42,476,159 $ 25,122,763 $ 24,419,908 $ 66,579,185 $ 66,896,067 Net Assets may serve over time as a useful indicator of a government’s financial position. For the City, Total Assets exceed Total Liabilities by $66,579,185 as of December 31, 2010. $50,727,373 reflects the investments in capital assets (land, construction in progress, buildings, improvements, machinery and equipment, furniture and fixtures and infrastructure) less any related debt to acquire those assets that is still outstanding. These capital assets are used to provide services to the City’s citizens; consequently, these assets are not available for future spending. Although, the City’s investment in its capital assets is reported net of related debt, it should be noted that resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Total Assets for 2010 decreased by $1,608,449 or 1.6 percent when compared to 2009. The decrease in Total Assets was influenced by a decrease in Cash and Cash Equivalents of 18.0 percent while an increase in Capital Assets percent moderated the decrease. The City’s Total Liabilities decreased $1,291,567 or 3.8 percent when compared to 2009. The largest decreases were due to accrued wages and benefits and the timing of the last payroll.



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Table 2 shows the changes in net assets for the year ended December 31, 2010 compared to 2009.

Table 2 Changes in Net Assets

Governmental Activities Business-Type Activities Total 2010 2009 2010 2009 2010 2009 Program Revenues: Charges for Services $ 7,294,233 $ 6,846,820 $ 1,758,085 $ 1,979,436 $ 9,052,318 $ 8,826,256 Operating Grants and Contributions 934,386 934,037 0 0 934,386 934,037 Capital Grants and Contributions 1,286,700 1,044,787 1,501,035 903,127 2,787,735 1,947,914 Total Program Revenues 9,515,319 8,825,644 3,259,120 2,882,563 12,774,439 11,708,207 General Revenues: Property and Other Local Taxes 6,684,862 7,067,140 0 0 6,684,862 7,067,140 Municipal Income Taxes 7,959,539 7,661,534 0 0 7,959,539 7,661,534 Franchise Tax 236,114 128,163 0 0 236,114 128,163 Admissions Tax 33,855 34,981 0 0 33,855 34,981 Grants and Entitlements 2,477,912 4,195,197 0 0 2,477,912 4,195,197 Investment Income 31,050 140,058 0 0 31,050 140,058 Miscellaneous 41,522 193,193 0 0 41,522 193,193 Total General Revenues 17,464,854 19,420,266 0 0 17,464,854 19,420,266 Transfers In 106,197 0 0 0 106,197 0 Total Revenues 27,086,370 28,245,910 3,259,120 2,882,563 30,345,490 31,128,473 Program Expenses: General Government 7,598,480 6,932,356 0 0 7,598,480 6,932,356 Security of Persons and Property 9,010,010 9,623,866 0 0 9,010,010 9,623,866 Public Health 1,428,688 1,437,857 0 0 1,428,688 1,437,857 Transportation 2,385,058 2,758,278 0 0 2,385,058 2,758,278 Community Development 816,485 720,892 0 0 816,485 720,892 Basic Utility Service 2,127,597 1,772,114 0 0 2,127,597 1,772,114 Leisure Time Activities 3,948,809 4,268,822 0 0 3,948,809 4,268,822 Interest and Fiscal Charges 790,980 824,261 0 0 790,980 824,261 Sanitary Sewer Charges 0 0 2,450,068 2,315,018 2,450,068 2,315,018 Transfers Out 0 0 106,197 0 106,197 0 Total Program Expenses 28,106,107 28,338,446 2,556,265 2,315,018 30,662,372 30,653,464 Increase (Decrease) in Net Assets (1,019,737) (92,536) 702,855 567,545 (316,882) 475,009 Net Assets January 1 42,476,159 42,568,695 24,419,908 23,852,363 66,896,067 66,421,058 Net Assets December 31 $ 41,456,422 $ 42,476,159 $ 25,122,763 $ 24,419,908 $ 66,579,185 $ 66,896,067



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Governmental Activities Governmental activities decreased the City’s Net Assets by $1,019,737 during 2010, compared to a decrease in 2009 of $92,536. The difference between 2010 and 2009 change in Net Assets is attributable to a decrease in General Revenues. Both Program Revenues and General Revenues fund the City’s governmental activities. The amount that Charges for Services revenue contributed to Total Program Revenues increased $447,413 from 2009 to 2010. Actual Charges for Services received over that period increased 6.5 percent. The City collects Charges for Services for the operation of the Rocky River Municipal Court; recreation; senior service; and building department fees. The Municipal Income Tax is the largest source of the City’s General Revenues. The income tax rate of 1/2 percent was established by City Ordinance No. 81-67, passed August 28, 1967. The income tax rate was amended on June 24, 1968 by City Ordinance No. 82-68 to increase the income tax rate to 1 percent and then on March 28, 1977, City Ordinance No. 5-77 approved an increase in the income tax rate to 1-1/2 percent and a change in the tax credit for residents having income taxable in another community. The income tax revenue amount for 2010 was $7,959,539, a $298,005 increase from 2009. The City monitors its sources of revenue very closely to react to any changes or fluctuations. The City accounts for municipal income tax revenues in the General Fund. Property and Other Local Taxes are 38.3 percent of Total General Revenues. Two factors have recently negatively impacted the property tax base. First, the phase out of the tangible personal property tax enacted by the General Assembly of the State of Ohio. And also, economic and real estate market conditions compelled the Cuyahoga County Auditor, who sets real property values, to cause a valuation decrease of five percent in the City. Both factors were offset by an increase in the collection percent experienced in 2010 from an estimated 96 percent to an actual 99 percent collection. Going forward, it is beginning to appear the property tax valuation decrease of percent will have an impact on the related revenue of the same magnitude. Grants and Entitlements decreased 40.9 percent from 2009 to 2010 due mostly to grant money received for capital projects in 2009. The amounts collected by the City under provisions of the Ohio Revised Code Chapter 5731, Estate Tax are recorded as Entitlements. During 2010, $1,446,147 was received as current distributions. The City accounts for Estate Tax revenue in the General Fund. Total Program Expenses for 2010 were $28,106,107, a 0.8 percent decrease from 2009 levels. Program category increases occurred for General Government; Community Development and Basic Utility Services. Moderating those increases and resulting in an overall expense decrease, expenses were lower in the program categories of Security of Persons and Property; Public Health; Transportation; Leisure Time Activities and Interest and Fiscal Charges. During 2010, the largest program category function for the City is Security of Persons and Property, which includes police and fire protection. This program accounts for 32.1 percent of expenses and decreased by $613,856 or 6.4 percent from 2009. A favorable health insurance claims year contributed to about 23 percent of the noted decrease. Other factors were decreased in the level of expenditures for fuel; vehicle maintenance; overtime (and therefore a decrease in related pension contributions) and equipment maintenance.



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The General Government program category accounts for 27.0 percent of Program Expenses. An increase of 9.6 percent or $666,124 occurred in this program category from 2009 to 2010. This program category reports the accumulated activity of the Rocky River Municipal Court; and other administrative functions of the City. The aforementioned affect of a favorable health insurance claims year was offset by increased cost related to property tax collections; municipal income tax collections and workers’ compensation premiums. The Leisure Time Activities program category was the third largest for 2010 and comprises 14.0 percent of Program Expenses which decreased by 7.5 percent from 2009. This program activity was affected by the elimination of a full-time position in May 2010 as well as a pay freeze for part-time, seasonal employees and an effort to control employment levels. Business-Type Activities For Business-Type Activities of the City, Charges for Services are the primary source of revenue. That revenue decreased 11.2 percent from 2009 to 2010. Capital Grants and Contributions revenue increased 66.2 percent from 2009 to 2010. This revenue category increase is related to the undertaking of Phase II of the Valley View Storm and Sanitary Sewer project, the largest phase. The Program Expenses are comprised of charges to operate the Rocky River Wastewater Treatment Plant as well as the cost to operate a crew of four employees to maintain the sanitary sewer collection system. The City's Funds Governmental Funds The focus of the City’s governmental funds is to provide information on a near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, the unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Information about the City's governmental funds begins on page 18. These funds are accounted for by using the modified accrual basis of accounting. As of December 31, 2010, the City’s governmental funds reported combining ending fund balances of $10,719,566. Of that amount, $5,455,737 constitutes unreserved fund balances, which is available for spending at the City’s discretion. The $5,263,829 remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed to liquidate contracts and purchases of prior period(s). All governmental funds had total revenues of $27,092,111 and expenditures of $29,119,277, leaving a $1,369,613 current year deficit, after consideration of the sources of $657,553 in other financing sources and uses. The General Fund is the most significant fund as it is the source for providing a significant portion of resources for governmental activities such as police, fire, service, legislative, and administrative functions. In 2010, the General Fund had total revenues and other financing sources of $17,945,884 and expenditures and other financing uses of $18,873,515 resulting in a decrease in fund balance at December 31, 2010 of $927,631. This represents 4.91 percent of the current year General Fund expenditures and other financing uses. Revenues were approximately $359,334 less than last year’s revenues while expenditures were



10

approximately $1,815,400 less than last year’s expenditures primarily due to a decrease in transfers out of approximately $1,000,000. The Recreation Center Fund accounts for the operation and maintenance of the City’s recreation facilities and activities. In 2010, the Recreation Center Fund had total revenues and other financing sources of $3,069,166 and expenditures of $3,024,946 resulting in an increase in fund balance of $44,220 at December 31, 2010. Revenues were approximately $118,556 above last year’s while expenditures were $263,375 less than last year’s expenditures. Since many of the recreation activities are subject to weather conditions, a warmer summer in 2010 compared to 2009 contributed to the revenue increase. Elimination of a full-time position in May 2010 as well as a pay freeze for part-time, seasonal employees and an effort to control employment levels impacted the lower level of expenditures. The General Obligation Bond Retirement Fund accounts for the repayment of general obligation bonds of the City. In 2010, the General Obligation Bond Retirement Fund had total revenues and other financing sources of $1,417,644 and expenditures of $1,575,068 resulting in a decrease in fund balance of $157,424 at December 31, 2010. Revenues ended $40,391 below last year’s revenues while expenditures were $11,385 less than last year’s expenditures due to the repayment of bond principal and interest. The Sewer Rehabilitation Fund accounts for a $25 per quarter fixed fee charged on all sanitary sewer accounts and is used to provide resources to rehabilitate the City’s sanitary sewer infrastructure through acquisition, construction or improvement. In 2010, the Sewer Rehabilitation Fund had total revenues and other financing sources of $1,676,686 and expenditures of $1,831,613 resulting in a decrease in fund balance of $154,927 at December 31, 2010. Revenues approximately equaled last year’s revenues while expenditures increased about $914,910 as improvement project construction activity ramped-up in 2010. The Capital Improvement Fund accounts for the various projects of the City financed by tax monies and General Fund transfers. In 2010, the Capital Improvement Fund had total revenues and other financing sources of $1,495,365 and expenditures of $1,262,663 resulting in an increase in fund balance of $232,702 at December 31, 2010. Revenues ended approximately $1,467,762 below last year’s revenues mainly due to a decrease in intergovernmental revenue. General Fund Budgeting Highlights The City's budget is prepared according to the general laws of the State of Ohio and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The most significant budgeted fund is the General Fund. During the course of 2010, the City supplemented the General Fund budget once. However, there was no change in total budgeted expenditures. The General Fund’s actual expenditures, not including other financing uses, were $1,405,272 under the final budgeted amount of $16,869,792. All capital projects and requests for capital type purchases are included in the annual appropriations ordinance and any supplemental appropriations ordinance(s) as necessary. Recommendations for budget changes are presented to City Council as a supplemental appropriations ordinance. The City administration may make budget changes that modify line items within departments within the same fund. The General Fund supports many major activities such as the Police Division, Fire Division, Engineer/Building, Finance, Rocky River Municipal Court, and Economic/Community Development Departments as well as the legislative and most executive activities. Some major capital projects are funded



11

with General Fund dollars. These funds are transferred from the General Fund to Capital Improvement Fund where the revenue and expenditures for the capital improvement project are tracked and monitored. For the General Fund, the original budgeted revenues were $17,519,122 and increased by $673,442 to $18,192,564 for final budgeted revenues, not including sale of capital assets. The level of liquidity in the General Fund, measured by the unrestricted cash at year-end, was about 11 percent of General Fund revenue and other financing sources. Capital Assets and Debt Administration Capital Assets Table 3 shows fiscal 2010 balances of Capital Assets as compared to 2009:

Table 3 Capital Assets at December 31

Governmental Activities Business-Type Activities Total 2010 2009 2010 2009 2010 2009 Land $ 2,017,826 $ 2,017,826 $ 39,516 $ 39,516 $ 2,057,342 $ 2,057,342 Land Improvements 203,158 203,158 0 0 203,158 203,158 Right of Way 0 0 250,000 250,000 250,000 250,000 Construction in Progress 2,951,171 1,892,166 1,896,782 1,035,202 4,847,953 2,927,368 Land Improvements 3,410,560 3,511,830 0 0 3,410,560 3,511,830 Buildings 23,252,263 23,839,090 0 0 23,252,263 23,839,090 Equipment 301,034 62,286 62,407 31,734 363,441 94,020 Vehicles 905,357 1,226,627 6,390 12,414 911,747 1,239,041 Infrastructure: Roads 7,610,998 7,840,167 0 0 7,610,998 7,840,167 Sidewalks 785,392 674,702 0 0 785,392 674,702 Traffic Signals 650,515 784,069 0 0 650,515 784,069 Storm Sewers 3,258,490 3,210,407 0 0 3,258,490 3,210,407 Sewer Lines 0 0 16,905,415 16,662,724 16,905,415 16,662,724 Water Mains 4,644,217 4,687,950 0 0 4,644,217 4,687,950 Total Capital Assets $ 49,990,981 $ 49,950,278 $ 19,160,510 $ 18,031,590 $ 69,151,491 $ 67,981,868 Total Capital Assets for the City as of December 31, 2010 were $69,151,491, a $1,169,623 increase over 2009. Capital asset additions of $3,572,550 were offset by $121,726 in disposals and $2,402,927 of depreciation expense. The City seeks funding assistance for infrastructure projects as well as improving City facilities and in 2008 was able to secure two interest free loans for two separate infrastructure projects whose construction began in 2009. It is through this type of financial assistance as well as grants and careful use of debt that the City proved able to improve upon capital assets and at the same time maintain revenue at a level that enables debt service loads at comfortable margins. See Note 9 for additional information on capital assets.



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Debt On December 31, 2010, the City had $18,424,118 in bonds and loans outstanding. Table 4 summarizes bonds and loans outstanding.

Table 4 Outstanding Debt at Year End

Governmental Activities Business-Type Activities Total 2010 2009 2010 2009 2010 2009 General Obligation Bonds $ 16,784,498 $ 17,877,319 $ 0 $ 0 $ 16,784,498 $ 17,877,319 Special Assessment Bonds 550,000 590,000 0 0 550,000 590,000 OPWC Loan 874,770 228,754 0 0 874,770 228,754 OWDA Loan 0 0 214,850 231,400 214,850 231,400 Total Outstanding Debt $ 18,209,268 $ 18,696,073 $ 214,850 $ 231,400 $ 18,424,118 $ 18,927,473 The outstanding General Obligation Bonds are composed of the following: 1) Rocky River Municipal Court Facility, Series 2002, of $2,875,000; 2) Various Purpose General Obligation Bonds, Series 2004, of $7,060,000 and 3) Civic Facility Improvements, Series 2005 of $6,530,000. There remains unamortized premiums related to these issues of $319,498. The principal and interest of the Series 2002 Bonds are paid from court costs assessed and collected in accordance with Ohio Revised Code Section 1901.26(B)(1) from the Municipal Court Capital Improvement Fund. The principal and interest of the Series 2004 Bonds are paid from monies transferred from the General Fund into the Debt Service Fund. The principal and interest of the Series 2005 Bonds are paid from property tax levy up to 1.0 mill approved for that purpose. The Special Assessment Bonds consist of Erosion Control A & B Bonds: one for $325,000 (Series 1998) and one for $225,000 (Series 2000). The principal and interest for these bonds are paid from the Special Assessment Fund with monies collected through the Cuyahoga County Auditor from the affected taxpayers. Principal and interest of the Ohio Water Development Authority (OWDA) loan is paid semi-annually from the Sanitary Sewer Fund and will be paid in full in the year 2020. The City's overall legal debt margin was $54,843,755 on December 31, 2010. See Note 17 of the Basic Financial Statements for additional information on the City’s debt.



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Current Financial Related Activities The City has historically enjoyed steady growth in revenues as a result of a strong tax base and moderate levels of new residential development and at the same time adopted a strong, fiscally responsible financial plan to function within available revenues. Because of economic growth of the tax base, the City has not needed an increase in taxes since 1993. The Mayor and City Council work extremely hard at keeping the debt burden low. The City makes financial plans so that certain improvements may be paid from current revenue and to maintain a high level of services. The City has committed itself to financial excellence which is proven by the bond rating Aa2 by Moody’s Investors Service that was last affirmed in 2005. The City’s commitment to its residents has always been one of full disclosure of financial matters of the City. This CAFR is available to all residents who wish to review it. City of Rocky River, Charter, Article III, Section 19, requires that, “[t]he Comprehensive Annual Financial Report, made to the City shall be filed with the Clerk of Council, who shall retain the then current report for public inspection. Within thirty days after the report is filed with the Clerk of Council, the Director of Finance shall submit a copy of the same report to the Rocky River Public Library.” (Amended 11-6-90). Contacting the City's Finance Department This CAFR is designed to provide citizens, taxpayers, creditors and investors with a general overview of the City's finances and show the City's accountability for all money it receives, spends or invests. Any questions about the CAFR or for additional financial information contact the Director of Finance, City of Rocky River, 21012 Hilliard Boulevard, Rocky River, Ohio 44116, (440) 331-0600. Certain information regarding the City is available through the website: www.rrcity.com.

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City of Rocky River, Ohio Statement of Net Assets December 31, 2010

The accompanying notes are an integral part of these financial statements.

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Business - Governmental Type Activities Activities Total Assets: Equity in Pooled Cash and Cash Equivalents $ 11,056,319 $ 214,309 $ 11,270,628 Accrued Interest Receivable 2,035 0 2,035 Accounts Receivable, Net of Allowance For Doubtful Accounts 396,420 553,308 949,728 Intergovernmental Receivable 1,859,820 0 1,859,820 Internal Balances (13,685) 13,685 0 Materials and Supplies Inventory 176,602 11,647 188,249 Prepaids 6,048 0 6,048 Taxes Receivable 8,866,204 0 8,866,204 Special Assessments Receivable 705,983 0 705,983 Investment in Joint Venture 0 5,821,706 5,821,706 Deferred Charges 27,890 0 27,890 Nondepreciable Capital Assets 5,172,155 2,186,298 7,358,453 Depreciable Capital Assets, Net 44,818,826 16,974,212 61,793,038 Total Assets 73,074,617 25,775,165 98,849,782 Liabilities: Accounts Payable 1,125,153 283,353 1,408,506 Contracts Payable 159,790 0 159,790 Accrued Wages and Benefits 60,221 5,515 65,736 Intergovernmental Payable 718,203 16,174 734,377 Unearned Revenue 6,348,792 0 6,348,792 Retainage Payable 114,030 0 114,030 Accrued Interest Payable 66,499 4,985 71,484 Claims Payable 107,473 0 107,473 Long-Term Liabilities: Due within One Year 1,706,241 35,431 1,741,672 Due in More than One Year 21,211,793 306,944 21,518,737 Total Liabilities 31,618,195 652,402 32,270,597 Net Assets: Invested in Capital Assets, Net of Related Debt 31,781,713 18,945,660 50,727,373 Restricted for: Capital Projects 6,304,738 0 6,304,738 Debt Service 129,556 0 129,556 Municipal Probation Services 387,247 0 387,247 Aging 51,446 0 51,446 Street Construction and Maintenance 414,993 0 414,993 Other Purposes 224,268 0 224,268 Unrestricted 2,162,461 6,177,103 8,339,564 Total Net Assets $ 41,456,422 $ 25,122,763 $ 66,579,185

City of Rocky River, Ohio Statement of Activities For The Year Ended December 31, 2010


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Program Revenues Operating Grants Capital Grants Charges for and and Expenses Services Contributions Contributions Government activities: General Government $ 7,598,480 $ 2,533,392 $ 45,122 $ 823,491 Security of Persons and Property 9,010,010 1,105,984 26,864 0 Public Health 1,428,688 495,138 0 0 Transportation 2,385,058 350 775,539 0 Leisure Time Activities 3,948,809 2,118,323 0 0 Community Development 816,485 175 0 0 Basic Utility Service 2,127,597 1,040,871 86,861 463,209 Interest and Fiscal Charges 790,980 0 0 0 Total Governmental Activities 28,106,107 7,294,233 934,386 1,286,700 Business-Type Activities: Sewer 2,450,068 1,758,085 0 1,501,035 Total $ 30,556,175 $ 9,052,318 $ 934,386 $ 2,787,735 General Revenues: Property Taxes Levied for: General Purposes Recreation Office on Aging Refuse and Recycling Fire Levy Police Levy Capital Improvements General Obligation Bond Retirement Municipal Income Taxes Levied for: General Purposes Franchise Tax Admissions Tax Grants and Entitlements not Restricted to Specific Programs Investment Income Other Transfers Total General Revenues and Transfers Change in Net Assets Net Assets Beginning of Year Net Assets End of Year

17

Primary Government Business Governmental Type Activities Activities Total $ (4,196,475) $ 0 $ (4,196,475) (7,877,162) 0 (7,877,162) (933,550) 0 (933,550) (1,609,169) 0 (1,609,169) (1,830,486) 0 (1,830,486) (816,310) 0 (816,310) (536,656) 0 (536,656) (790,980) 0 (790,980) (18,590,788) 0 (18,590,788) 0 809,052 809,052 (18,590,788) 809,052 (17,781,736) 3,872,423 0 3,872,423 307,335 0 307,335 307,335 0 307,335 614,670 0 614,670 184,401 0 184,401 184,401 0 184,401 614,670 0 614,670 599,627 0 599,627 7,959,539 0 7,959,539 236,114 0 236,114 33,855 0 33,855 2,477,912 0 2,477,912 31,050 0 31,050 41,522 0 41,522 106,197 (106,197) 0 17,571,051 (106,197) 17,464,854 (1,019,737) 702,855 (316,882) 42,476,159 24,419,908 66,896,067 $ 41,456,422 $ 25,122,763 $ 66,579,185

City of Rocky River, Ohio Balance Sheet Governmental Funds December 31, 2010


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General Obligation Recreation Bond General Center Retirement Assets: Equity in Pooled Cash and Cash Equivalents $ 2,147,972 $ 289,778 $ 127,225 Accrued Interest Receivable 1,719 0 0 Accounts Receivable, Net of Allowance For Doubtful Accounts 312,374 7,750 0 Intergovernmental Receivable 829,263 22,504 48,119 Interfund Receivable 500,000 0 0 Materials and Supplies Inventory 17,700 6,329 0 Municipal Income Taxes Receivable 2,264,193 0 0 Prepaids 6,048 0 0 Property Taxes Receivable 3,815,840 302,845 605,689 Special Assessments Receivable 0 0 0 Total Assets $ 9,895,109 $ 629,206 $ 781,033 Liabilities and Fund Balances: Liabilities: Accounts Payable $ 298,387 $ 78,425 $ 0 Contracts Payable 0 0 0 Accrued Wages and Benefits 20,106 10,010 0 Intergovernmental Payable 256,447 63,387 0 Interfund Payable 0 500,000 Deferred Revenue 5,760,894 325,349 653,808 Retainage Payable 4,628 0 0 Total Liabilities 6,340,462 977,171 653,808 Fund Balances: Reserve for Encumbrances 353,007 42,425 0 Reserve for Inventory 17,700 6,329 0 Unreserved, Undesignated (Deficit), Reported In: General Fund 3,183,940 0 0 Special Revenue Funds 0 (396,719) 0 Debt Service Funds 0 0 127,225 Capital Project Funds 0 0 0 Total Fund Balances (Deficit) 3,554,647 (347,965) 127,225 Total Liabilities and Fund Balances $ 9,895,109 $ 629,206 $ 781,033

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Other Total Sewer Capital Governmental Governmental Rehabilitation Improvement Funds Funds $ 2,431,076 $ 1,914,689 $ 3,667,666 $ 10,578,406 0 97 219 2,035

0 0 76,296 396,420

406,559 92,572 460,803 1,859,820 0 0 0 500,000

0 0 152,573 176,602 0 0 0 2,264,193 0 0 0 6,048 0 605,689 1,271,948 6,602,011 0 0 705,983 705,983 $ 2,837,635 $ 2,613,047 $ 6,335,488 $ 23,091,518 $ 545,095 $ 0 $ 203,246 $ 1,125,153 0 159,790 0 159,790 0 0 30,105 60,221 0 0 398,369 718,203 0 0 0 500,000 0 650,199 2,304,305 9,694,555 42,647 66,755 0 114,030 587,742 876,744 2,936,025 12,371,952 3,151,590 1,253,006 287,199 5,087,227 0 0 152,573 176,602 0 0 0 3,183,940 0 0 772,424 375,705 0 0 2,486 129,711 (901,697) 483,297 2,184,781 1,766,381 2,249,893 1,736,303 3,399,463 10,719,566 $ 2,837,635 $ 2,613,047 $ 6,335,488 $ 23,091,518

City of Rocky River, Ohio Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities December 31, 2010


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Total Governmental Funds Balance $ 10,719,566 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. 49,990,981 Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds. Delinquent Property Taxes $ 253,220 Other Local Taxes 41,685 Municipal Income Taxes 1,255,692 Special Assessments 705,983 Charges for Services 66,206 Intergovernmental 1,022,977 Total 3,345,763 In the statement of activities, interest is accrued on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due. (66,499) Internal service funds are used by management to charge the costs of certain activities, such as insurance to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net assets. Net Assets 370,440 Internal Balance (13,685) Total 356,755 Bond issuance costs will be amortized over the life of the bonds on the statement of assets. 27,890 Long-term liabilities are not due and payable in the current period and are therefore not reported in the funds. General Obligation Bonds (16,784,498) Special Assessments (550,000) Ohio Public Works Commission Loan (874,770) Compensated Absences (4,187,161) Police and Fire Pension Liability (521,605) Total (22,918,034) Net Assets of Governmental Activities $ 41,456,422

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City of Rocky River, Ohio Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For The Year Ended December 31, 2010


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General Obligation Recreation Bond General Center Retirement Revenues: Property Taxes $ 3,873,395 $ 307,412 $ 599,782 Municipal Income Taxes 8,106,509 0 0 Other Local Taxes 37,189 0 0 Intergovernmental 2,617,257 43,431 86,862 Charges for Services 22,177 2,097,150 0 Fines, Fees and Permits 3,070,179 0 0 Special Assessments 0 0 0 Investment Income 25,156 0 0 Rentals 82,874 21,173 0 Other 99,611 0 0

Total Revenues 17,934,347 2,469,166 686,644

Expenditures: Current: Security of Persons and Property 7,585,078 0 0 Public Health 0 0 0 Leisure Time Activities 365,989 3,021,489 0 Community Development 792,068 0 0 Basic Utility Service 0 0 0 Transportation 653,615 0 0 General Government 4,959,474 0 0 Capital Outlay 46,291 3,457 0 Debt Service: Principal Retirement 0 0 955,000 Interest and Fiscal Charges 0 0 620,068

Total Expenditures 14,402,515 3,024,946 1,575,068

Excess of Revenues Over (Under) Expenditures 3,531,832 (555,780) (888,424)

Other Financing Sources (Uses): Issuance of Debt 0 0 0 Sale of Capital Assets 11,537 0 0 Transfers - In 0 600,000 731,000 Transfers - Out (4,471,000) 0 0

Total Other Financing Sources (Uses) (4,459,463) 600,000 731,000

Net Change in Fund Balances (927,631) 44,220 (157,424)

Fund Balances (Deficit) at Beginning of Year 4,482,278 (392,185) 284,649

Fund Balances (Deficit) at End of Year $ 3,554,647 $ (347,965) $ 127,225

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Other Total Sewer Capital Governmental Governmental Rehabilitation Improvement Funds Funds $ 0 $ 614,825 $ 1,291,133 $ 6,686,547 0 0 0 8,106,509 0 232,780 0 269,969 0 41,944 1,894,411 4,683,905 1,030,670 1,450 484,158 3,635,605 0 550 334,590 3,405,319 0 0 61,788 61,788 0 1,666 4,228 31,050 0 0 0 104,047 0 2,150 5,611 107,372

1,030,670 895,365 4,075,919 27,092,111

0 0 1,400,769 8,985,847 0 0 1,298,805 1,298,805 0 0 0 3,387,478 0 0 0 792,068 1,831,613 0 1,555,516 3,387,129 0 0 1,552,567 2,206,182 0 0 23,541 4,983,015 0 1,262,663 812,988 2,125,399 0 0 183,080 1,138,080 0 0 195,206 815,274

1,831,613 1,262,663 7,022,472 29,119,277

(800,943) (367,298) (2,946,553) (2,027,166)

646,016 0 0 646,016 0 0 0 11,537 0 600,000 2,540,000 4,471,000 0 0 0 (4,471,000)

646,016 600,000 2,540,000 657,553

(154,927) 232,702 (406,553) (1,369,613)

2,404,820 1,503,601 3,806,016 12,089,179

$ 2,249,893 $ 1,736,303 $ 3,399,463 $ 10,719,566

City of Rocky River, Ohio Reconciliation of The Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For The Year Ended December 31, 2010


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Net Change in Fund Balances - Total Governmental Funds $ (1,369,613) Amounts Reported for Governmental Activities in the Statement of

Activities are different because: Governmental funds report capital outlay as expenditures. However in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital Outlay $ 2,025,794 Capital Assets Transferred 106,197 Depreciation (2,091,288) Total 40,703 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the Funds. Property and Other Taxes (1,685) Municipal Income Taxes (146,970) Special Assessments 24,102 Charges for Services (2,588) Intergovernmental 15,093 Total (112,048) Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 1,110,000 Proceeds from debt issues and inceptions of capital leases are other financing sources in the funds, but debt issues and new leases increase long-term liabilities in the Statement of Net Assets (646,016) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrued Interest on Bonds 3,114 Amortization of Bond Premium 22,821 Amortization of Issuance Costs (1,641) Total 24,294 (continued)

City of Rocky River, Ohio Reconciliation of The Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities (continued) For The Year Ended December 31, 2010


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Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Compensated Absences (231) Police and Fire Pension Liability 28,080 Total 27,849 The internal service fund used by management to charge the costs of insurance to individual funds is not reported in the entity-wide statement of activities. Governmental expenditures and related internal service fund revenues are eliminated. The net expense of the internal service fund is allocated among the governmental activities Change in Net Assets (81,221) Change in Internal Balance (13,685) Total (94,906) Change in Net Assets of Governmental Activities $ (1,019,737)

City of Rocky River, Ohio Statement of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual General Fund For The Year Ended December 31, 2010


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Variance with Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property and Other Taxes $ 4,249,724 $ 4,249,724 $ 3,873,395 $ (376,329) Municipal Income Taxes 7,614,542 8,000,000 7,973,505 (26,495) Other Local Taxes 38,073 40,000 33,855 (6,145) Intergovernmental 2,006,375 2,107,940 2,742,053 634,113 Charges for Services 33,980 35,700 22,177 (13,523) Rentals 71,387 75,000 82,874 7,874 Fines, Fees, and Permits 3,225,329 3,388,600 3,049,281 (339,319) Investment Income 171,327 180,000 33,631 (146,369) Miscellaneous Income 108,385 115,600 99,611 (15,989) Total Revenues 17,519,122 18,192,564 17,910,382 (282,182) Expenditures: Current: General Government 5,727,288 5,898,288 5,501,182 397,106 Security of Persons and Property 8,693,072 8,746,072 8,061,803 684,269 Transportation 801,321 789,321 687,501 101,820 Community Development 908,151 908,151 787,564 120,587 Leisure Time Activities 465,420 451,420 376,306 75,114 Capital Outlay 88,540 76,540 50,164 26,376 Total Expenditures 16,683,792 16,869,792 15,464,520 1,405,272 Excess of Revenues Over (Under) Expenditures 835,330 1,322,772 2,445,862 1,123,090 Other Financing Sources (Uses): Sale of Capital Assets 19,036 20,000 110 (19,890) Transfers - Out (5,052,000) (4,866,000) (4,471,000) 395,000 Total Other Financing Sources (Uses) (5,032,964) (4,846,000) (4,470,890) 375,110 Net Change in Fund Balance (4,197,634) (3,523,228) (2,025,028) 1,498,200 Fund Balance at Beginning of Year 3,566,327 3,566,327 3,566,327 0 Prior Year Encumbrances Appropriated 158,400 158,400 158,400 0 Fund Balance at End of Year $ (427,907) $ 201,499 $ 1,699,699 $ 1,498,200

City of Rocky River, Ohio Statement of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Recreation Center Fund For The Year Ended December 31, 2010


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Variance with Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 337,280 $ 337,280 $ 307,412 $ (29,868) Charges for Services 2,262,446 2,211,000 2,095,331 (115,669) Intergovernmental 0 0 43,431 43,431 Rentals 30,698 30,000 21,173 (8,827) Total Revenues 2,630,424 2,578,280 2,467,347 (110,933) Expenditures: Current: Leisure Time Activities 3,479,038 3,479,038 3,257,597 221,441 Capital Outlay 6,157 6,157 4,028 2,129 Total Expenditures 3,485,195 3,485,195 3,261,625 223,570 Excess of Revenues Over (Under) Expenditures (854,771) (906,915) (794,278) 112,637 Other Financing Sources (Uses): Transfers-In 613,961 600,000 600,000 0 Net Change in Fund Balances (240,810) (306,915) (194,278) 112,637 Fund Balance at Beginning of Year 342,605 342,605 342,605 0 Prior Year Encumbrances Appropriated 72,100 72,100 72,100 0 Fund Balance at End of Year $ 173,895 $ 107,790 $ 220,427 $ 112,637

City of Rocky River, Ohio Statement of Fund Net Assets Proprietary Funds December 31, 2010


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Business Type Governmental Activities - Activities - Internal Sewer Service Fund Assets: Current Assets: Equity in Pooled Cash and Cash Equivalents $ 214,309 $ 477,913 Accounts Receivable 553,308 0 Materials and Supplies Inventory 11,647 0 Total Current Assets 779,264 477,913 Noncurrent Assets: Investment in Joint Venture 5,821,706 0 Nondepreciable Capital Assets 2,186,298 0 Depreciable Capital Assets, Net 16,974,212 0 Total Noncurrent Assets 24,982,216 0 Total Assets 25,761,480 477,913 Liabilities: Current Liabilities: Accounts Payable 283,353 0 Accrued Wages and Benefits 5,515 0 Intergovernmental Payable 16,174 0 Claims Payable 0 107,473 Accrued Interest Payable 4,985 0 Compensated Absences Payable 18,104 0 OWDA Loans Payable 17,327 0 Total Current Liabilities 345,458 107,473 Long-term Liabilities: Accrued Compensated Absences (Net of Current Portion) 109,421 0 OWDA Loans Payable (Net of Current Portion) 197,523 0 Total Long-Term Liabilities 306,944 0 Total Liabilities 652,402 107,473

Net Assets: Invested in Capital Assets, Net of Related Debt 18,945,660 0 Unrestricted 6,163,418 370,440 Total Net Assets 25,109,078 $ 370,440 Net Assets reported for Business-Type Activities in the Statement of Net Assets are different because they include accumulated overpayments to the Internal Service Fund: 13,685 Net Assets of Business-Type Activities $ 25,122,763

City of Rocky River, Ohio Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For The Year Ended December 31, 2010


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Governmental Business-Type Activities - Activities Internal Sewer Fund Operating Revenues: Charges for Services $ 1,758,085 $ 2,005,733 Operating Expenses: Personal Service 594,079 0 Materials and Supplies 52,937 0 Contractual Services 1,462,898 303,879 Capital Outlay 7,708 0 Heat, Light and Power 20,454 0 Depreciation 311,639 0 Other 4,241 0 Claims 0 1,783,075 Total Operating Expenses 2,453,956 2,086,954 Operating Loss (695,871) (81,221) Non-Operating Revenue (Expenses): Interest Expense (9,797) 0 Loss before Capital Contributions and Transfers (705,668) (81,221) Contributed Capital 1,501,035 0 Transfers (106,197) 0 Total Contributed Capital and Transfers 1,394,838 0 Change in Net Assets 689,170 (81,221) Net Assets at Beginning of Year 451,661 Net Assets at End of Year $ 370,440 Some amount reported for Business-Type Activities in the Statement of Activities are different because of a portion of the Change in Net Assets of the Internal Service Fund is reported with Business-Type Activities: 13,685 Change in Net Assets of Business-Type Activities $ 702,855

City of Rocky River, Ohio Statement of Cash Flows Proprietary Fund Types For The Year Ended December 31, 2010


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Governmental Business-Type Activities - Activities Internal Sewer Fund Cash Flows from Operating Activities: Cash Received from Customers $ 1,739,031 $ 2,005,733 Cash Payments for Goods and Services (1,096,705) (303,879) Cash Payments to Employees for Services and Benefits (613,119) 0 Cash Payments for Claims 0 (1,766,086) Cash Payments for Other Operating Expenses (3,865) 0 Net Cash Provided by (used for) Operating Activities 25,342 (64,232)

Cash Flows from Capital and Related Financing Activities: Capital Acquisitions (45,721) 0 Principal Paid on OWDA Loan (16,550) 0 Interest Paid on OWDA Loan (10,547) 0 Net Cash Used for Capital Financing Activities (72,818) 0

Net Decrease Cash and Cash Equivalents (47,476) (64,232)

Cash and cash Equivalents at Beginning of Year 261,785 542,145

Cash and Cash Equivalents at End of Year $ 214,309 $ 477,913

Reconciliation of Operating Loss to Net Cash from Operating Activities:

Operating Loss $ (695,871) $ (81,221)

Adjustments: Depreciation 311,639 0 Change in Operating Assets and Liabilities: Accounts Receivable (19,054) 0 Materials and Supplies Inventory 4,706 0 Joint Venture 172,466 0 Accounts Payable 269,420 0 Accrued Wages and Benefits (16,069) 0 Compensated Absences Payable 9,861 0 Intergovernmental Payable (11,756) 0 Claims Payable 0 16,989 Total Adjustments 721,213 16,989

Net Cash Provided by (used for) Operating Activities $ 25,342 $ (64,232)

Noncash investing, capital and financing activities: During the year, the Sewer Fund acquired capital assets in the amount of $1,501,035 via capital contributions and disposed of $106,197 in Construction in Progress as a transfer to the Governmental Activities.

City of Rocky River, Ohio Statement of Fiduciary Net Assets Fiduciary Funds December 31, 2010


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Investment Trust Individual Investment Account Agency Assets: Equity in Pooled Cash and Cash Equivalents $ 0 $ 339,519 Cash and Cash Equivalents: In Segregated Accounts 5,416,062 545,794 Total assets 5,416,062 $ 885,313 Liabilities: Undistributed Monies 0 $ 270,305 Deposits Held and Due to Others 0 615,008 Total Liabilities 0 $ 885,313 Net assets: Held in trust for participants $ 5,416,062

City of Rocky River, Ohio Statement of Changes in Fiduciary Net Assets Investment Trust Funds For The Year Ended December 31, 2010


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Individual Investment Account Additions: Interest $ 26,823 Capital transaction - purchases 9,857,962 Total additions 9,884,785 Deductions: Capital transaction - redemption 10,190,337 Distributions to participants 30,140 Total deductions 10,220,477 Changes in net assets (335,692) Net assets beginning of year 5,751,754 Net assets end of year $ 5,416,062

City of Rocky River, Ohio Notes to Basic Financial Statements For The Year Ended December 31, 2010

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Note 1: Description of City and Reporting Entity The City of Rocky River (City) is a home rule municipal corporation, established under the laws of the State of Ohio and operated under a charter. The charter provides for a Council/Mayor form of government whereby the Mayor is the administrative officer of the City. The Charter was originally adopted in 1960 and has been amended periodically; most recently in 2008. The Mayor, Law Director and seven member Council all serve two year terms. Reporting Entity For financial reporting purposes, the reporting entity is comprised of the primary government, component units and other organizations that are included to ensure that the financial statements of the City are not misleading. The primary government consists of all funds, departments, boards and agencies that are not legally separate from the City. The City provides various services including police and fire protection, health, parks and recreation, street maintenance, planning and zoning, sewer services, municipal court, senior adult and general administrative services. The operation of these activities is directly controlled by the City Administration and City Council (through the budgetary process). None of these services are provided by a legally separate organization; therefore, these operations are included in the primary government. Component units are legally separate organizations for which the City is financially accountable. The City is financially accountable for an organization if the City appoints a voting majority of the organization's governing board and (1) the City is able to significantly influence the programs or services performed or provided by the organization; or (2) the City is legally entitled to or can otherwise access the organization's resources; the City is legally obligated or has otherwise assumed the responsibility to finance deficits of or provide financial support to the organization; or the City is obligated for the debt of the organization. Component units may also include organizations for which the City approves the budget, the issuance of debt, or the levying of taxes. The City has no component units. The Rocky River Wastewater Treatment Plant (Plant) is a joint venture among the cities of Rocky River, Bay Village, Fairview Park, and Westlake. The Plant has a Management Committee consisting of the Mayor of each Member City or his/her designee and a fifth member who is appointed by the four Mayors. The Director of Finance of the City of Rocky River serves as fiscal agent for the Plant. The Plant is managed by the City of Rocky River with a report of operational activities made to the Management Committee annually. Personnel at the Plant are employees of the City of Rocky River. Pursuant to the organizing agreement (and amendments), the Plant is jointly owned by the Member Cities with each Member City’s share being in proportion to its contribution to the total cost of constructing certain improvements. The Plant is a joint venture in which each Member City has an equity interest. The City has an explicit and measurable equity interest in the Plant. There exists a residual interest in the assets upon dissolution of the joint venture. The City also has an ongoing financial responsibility for its share of the joint venture liabilities. Additionally, the City has an ongoing financial responsibility since the City's participation is essential to the continued existence of the Plant. The Plant is further described in Note 10 of the basic financial statements.

City of Rocky River, Ohio Notes to Basic Financial Statements (continued) For The Year Ended December 31, 2010

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Note 1: Description of City and Reporting Entity (continued) Reporting Entity (continued) The City participates in other organizations: jointly governed organizations and a related organization. See Notes 19 and 24 to the basic financial statements for further information. The City also participates in a Joint Economic Development Zone, see Note 25 for further information. Note 2: Summary of Significant Accounting Policies The financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The City also applies guidance issued on or before November 30, 1989 by the Financial Accounting Standards Board (“FASB”) which established the FASB Accounting Standards Codification (“ASC”) as the single source of authoritative accounting principles generally accepted in the United States of America, to its governmental and business type activities and to its proprietary funds provided they do not conflict with or contradict GASB pronouncements. The City has elected not to apply FASB codification, issued after November 30, 1989, to its business type activities and enterprise fund. The more significant of the City's accounting policies are described below. A. Basis of Presentation The City’s basic financial statements consist of government-wide statements, including a statement of net assets and a statement of activities, and fund financial statements, which provide a more detailed level of financial information. Government-wide Financial Statements The statement of net assets and the statement of activities display information about the City as a whole. These statements include the financial activities of the primary government, except for fiduciary funds. The activity of the internal service fund is eliminated to avoid “doubling up” of the related revenues and expenses. The statements distinguish between those activities of the City that are governmental and those that are considered business-type. The statement of net assets presents the financial condition of the governmental and business-type activities of the City at year-end. The statement of activities presents a comparison between direct expenses and program revenues for each program or function of the City’s governmental activities and for the business-type activities of the City. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. Revenues which are not classified as program revenues are presented as general revenues of the City, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each governmental program or business activity is self-financing or draws from the general revenues of the City.


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Note 2: Summary of Significant Accounting Policies (continued) A. Basis of Presentation (continued) Fund Financial Statements During the year, the City segregates transactions related to certain City functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the City at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. The internal service fund is presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by type. B. Fund Accounting The City uses funds to maintain its financial records during the year. A fund is defined as a fiscal and accounting entity with a self balancing set of accounts. The City reports three categories of funds: governmental, proprietary and fiduciary. Governmental Funds Governmental funds are those through which most governmental functions are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is reported as fund balance. The following are the City's major governmental funds:

General Fund The General Fund accounts for all financial resources except those required to be accounted for in another fund. The general fund balance is available to the City for any purpose provided it is expended or transferred according to the charter of the City and/or the general laws of the State of Ohio.

Recreation Center Fund The Recreation Fund accounts for membership fees, program fees, general fund subsidies and levied property tax revenue used for the operation and maintenance of the City's recreation activities. General Obligation Bond Retirement Fund The General Obligation Bond Retirement Fund accounts for resources that are utilized for the repayment of general obligation bonds of the City.

Sewer Rehabilitation Fund The Sewer Rehabilitation Fund accounts for a fixed fee sanitary sewer charge to be used for the accumulation of resources to rehabilitate through acquisition, construction, or improvement the City’s sanitary sewer infrastructure.

Capital Improvement Fund The Capital Improvement Fund accounts for the various projects of the City financed by tax monies and general fund subsidies.

The other governmental funds of the City account for grants and other resources whose use is restricted to a particular purpose.


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Note 2: Summary of Significant Accounting Policies (continued) B. Fund Accounting (continued) Proprietary Funds Proprietary fund reporting focuses on the determination of operating income, changes in net assets, financial position and cash flows. Proprietary funds are classified as either enterprise or internal service.

Enterprise Fund Enterprise funds may be used for any activity for which a fee is charged to external users for goods and services. The City’s major enterprise fund accounts for the collection of sanitary sewer charges. This fund also accounts for the City’s joint venture investment in the Rocky River Wastewater Treatment Plant. Internal Service Fund Internal service funds account for the financing of services provided by one department or agency to other departments or agencies of the City on a cost-reimbursement basis. The City’s internal service fund accounts for a self-insurance program for employee health benefits.

Fiduciary Funds Fiduciary fund reporting focuses on net assets and changes in net assets. The fiduciary fund category is split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds and agency funds. Trust funds are used to account for assets held by the City for individuals, private organizations, or other governments and are therefore not available to support the City’s own programs. The City’s trust fund is an investment trust fund established to account for the investing activity of the Rocky River Wastewater Treatment Plant which is managed by the City. Agency funds are custodial in nature (assets equal liabilities) and thus do not involve measurement of results of operations. The City’s agency funds are for deposits, the Tri-City Council of Governments, donations and bequests, Municipal Court, and the S.A.F.E. Council of Governments. C. Measurement Focus Government-wide Financial Statements The government-wide financial statements are prepared using a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of the City are included on the Statement of Net Assets. The Statement of Activities presents increases (e.g. revenues) and decreases (e.g. expenses) in total net assets. Fund Financial Statements All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.


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Note 2: Summary of Significant Accounting Policies (continued) C. Measurement Focus (continued) Like the government-wide statements, all proprietary funds are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the statement of fund net assets. The statement of revenues, expenses and changes in fund net assets presents increases (i.e., revenues) and decreases (i.e., expenses) in total net assets. The statement of cash flows provides information about how the City finances and meets the cash flow needs of its proprietary activities. D. Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting; proprietary and fiduciary funds also use the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Differences in the accrual and modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred revenue and in the presentation of expenses versus expenditures.

Revenues - Exchange and Nonexchange Transactions Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the year in which the resources are measurable and become available. Available means that the resources will be collected within the current year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current year. For the City, available means expected to be received within sixty days of year-end. Nonexchange transactions, in which the City receives value without directly giving equal value in return, include income taxes, property taxes, grants, entitlements and donations. On an accrual basis, revenue from income taxes is recognized in the period in which the income is earned. Revenue from property taxes is recognized in the year for which the taxes are levied (See Note 6). Revenue from grants, entitlements and donations is recognized in the year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. On the modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at year-end: income tax, State of Ohio levied locally shared taxes (including gasoline tax and motor vehicle license fees), fines and forfeitures, interest, grants and entitlements and rent.


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Note 2: Summary of Significant Accounting Policies (continued) D. Basis of Accounting (continued) Unearned/Deferred Revenue Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Property taxes for which there is an enforceable legal claim as of December 31, 2010, but which were levied to finance year 2011 operations, have been recorded as unearned revenue. Grants and entitlements received before the eligibility requirements are met are also recorded as unearned revenue. On governmental fund financial statements, receivables that will not be collected within the available period have also been reported as deferred revenue. Expenses/Expenditures On the accrual basis of accounting, expenses are recognized at the time they are incurred. The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds. E. Cash and Cash Equivalents To improve cash management, cash received by all funds is pooled. Monies for these funds, including proprietary funds, are maintained in this pool. Individual fund integrity is maintained through City records. Each fund’s interest in the pool is presented as "equity in pooled cash and cash equivalents”. Investments of the cash management pool and investments with original maturities of three months or less at the time they are purchased by the City are presented on the financial statements as cash equivalents. Except for nonparticipating investment contracts, investments are reported at fair value which is based on quoted market prices. Nonparticipating investment contracts and nonnegotiable certificates of deposit are reported at cost. The City has invested funds in the State Treasury Asset Reserve of Ohio (STAR Ohio) during fiscal year 2010. STAR Ohio is a statewide investment pool managed by the Ohio Treasurer of State. Participation is offered to Ohio political subdivisions as defined in Ohio Revised Code Section 135.45(F)(2)(a). STAR Ohio is not registered with the Securities Exchange Commission (SEC) as an investment company, but maintains a policy to operate as a “2a7 like pool” in a manner consistent with GASB Statement No. 31 “Accounting and Financial Reporting for Certain Investments and for External Investment Pools.” Investments in STAR Ohio are valued at STAR Ohio’s share price which is the price the investment could be sold for on December 31, 2010. Investment procedures are restricted by the provisions of the City Charter and the general laws of the State of Ohio. Interest revenue credited to the general fund during 2010 amounted to $25,156, which includes $14,550 assigned from other City funds.


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Note 2: Summary of Significant Accounting Policies (continued) E. Cash and Cash Equivalents (continued) The City serves as fiscal agent for the Rocky River Wastewater Treatment Plant. A related individual investment account is presented as “cash and cash equivalents in segregated accounts” and represent deposits or nonnegotiable certificates of deposit which are reported at cost. During 2010, investments purchased through this account were limited to a nonnegotiable certificates of deposit and are reported at fair value. F. Inventory Inventories are presented at cost on a first-in, first-out basis and are expended/expensed when used. Inventory consists of expendable supplies. G. Deferred Charges Bond issuance costs and any premium or discount are deferred and amortized over the term of the bonds using the straight-line method since the results are not significantly different from the effective interest method. H. Investment in Joint Venture The investment in the Rocky River Wastewater Treatment Plant joint venture is reported using the equity method of accounting. I. Prepaid Items Payments made to vendors for services that will benefit periods beyond December 31, 2010 are recorded as prepaid items using the consumption method by recording a current asset for the prepaid amount and reflecting the expenditure/expense in the year in which services are consumed. J. Capital Assets General capital assets are capital assets which are associated with and arise from governmental activities. They generally result from expenditures in the governmental funds. General capital assets are reported in the governmental activities column of the government-wide statement of net assets but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business-type activities column of the government-wide statement of net assets and in the respective funds. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated capital assets are recorded at their fair market values as of the date received. The City maintains a capitalization threshold of $2,500. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not. Interest incurred during the construction of proprietary fund capital assets is also capitalized.


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Note 2: Summary of Significant Accounting Policies (continued) J. Capital Assets (continued) All capital assets are depreciated except for land; certain land improvements; rights of way and construction in progress. Improvements are depreciated over the remaining useful lives of the related capital assets. For 2010, the City’s infrastructure consists of roads, traffic signals, sidewalks, storm sewers, and water mains. In addition, the City has recorded construction in progress for City road and sewer projects initiated in 2010. Useful lives for infrastructure were estimated based on the City’s historical records of necessary improvements and replacement. Depreciation is computed using the straight-line method over the following useful lives: Buildings 50 Years Equipment 5 - 10 Years Vehicles 5 Years Infrastructure 18 - 75 Years

K. Interfund Balances On the fund financial statements, outstanding interfund loans and unpaid amounts for interfund services are reported as “interfund receivable/payable”. Interfund loans which do not represent available expendable resources are offset by a fund balance reserve account. Interfund balance amounts are eliminated in the statement of net assets, except for any net residual amounts due between governmental and business-type activities, which are presented as internal balances. See Note 20 for interfund receivables/payables as of December 31, 2010. L. Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees' rights to receive compensation are attributable to services already rendered and it is probable that the City will compensate the employees for the benefits through paid time off or some other means. The City records a liability for all accumulated unused vacation time when earned for all employees with more than one month of service. Sick leave benefits are accrued as a liability using the vesting method. The liability includes the employees who are currently eligible to receive termination benefits and those that the City has identified as probable of receiving payment in the future (those employees who will be eligible to receive termination payments in the next twenty years). The amount is based on accumulated sick leave and employee wage rates at year end taking into consideration any limits specified in the City's termination policy and employees with two or more years of service. M. Accrued Liabilities and Long-term Obligations All payables, accrued liabilities and long-term obligations are reported in the government-wide financial statements, and all payables, accrued liabilities and long-term obligations payable from proprietary funds are reported on the proprietary fund financial statements.


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Note 2: Summary of Significant Accounting Policies (continued) M. Accrued Liabilities and Long-term Obligations (continued) In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources, are reported as obligations of the funds. However, claims and judgments and compensated absences that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they are due for payment during the current year. Bonds and long-term loans are recognized as a liability on the governmental fund financial statements when due. N. Fund Balance Reserves The City reserves those portions of fund balance which are legally segregated for a specific future use or which do not represent expendable resources and therefore are not available for appropriation or expenditure. Fund balance reserves have been established for encumbrances and inventories. O. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through constitutional provisions or enabling legislation or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Net assets restricted for other purposes include miscellaneous State and Federal grants. The government-wide Statement of Net Assets reports $7,512,248 of Restricted Net Assets, none of which are restricted by enabling legislation. Net assets restricted for other purposes include resources for police and fire programs, refuse and recycling programs, and streets and highways. The City applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. P. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the City, these revenues are charges for services for sanitary sewer services and self-insurance programs. Operating expenses are necessary costs that have been incurred in order to provide the good or service that is the primary activity of the fund. All revenues and expenses not meeting this definition are reported as nonoperating.


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Note 2: Summary of Significant Accounting Policies (continued) Q. Interfund Activity Transfers between governmental and business-type activities on the government-wide statements are reported in the same manner as general revenues. Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Repayments from funds responsible for particular expenditures/expenses to the funds that initially paid for them are not presented on the financial statements. R. Extraordinary and Special Items Extraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence. Special items are transactions or events that are within the control of the City and that are either unusual in nature or infrequent in occurrence. Neither occurred in 2010. S. Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. T. Budgetary Data All funds, except agency funds, are legally required to be budgeted and appropriated. The major documents prepared are the Alternative Tax Budget Information, the Certificate of Estimated Resources, and the Appropriations Ordinance, all of which are prepared on the budgetary basis of accounting. The Alternative Tax Budget Information demonstrates a need for existing or increased tax rates. The Certificate of Estimated Resources establishes a limit on the amount Council may appropriate. The Appropriations Ordinance is Council’s authorization to spend resources and sets annual limits on expenditures plus encumbrances at the level of control selected by Council. The legal level of control has been established by Council through the Appropriation Ordinance at the object level within each department for the general fund and at the object level for all other funds. Budgetary modifications may only be made by ordinance of the City Council at the legal level of control. The Certificate of Estimated Resources may be amended during the year if projected increases or decreases in revenue are identified by the Director of Finance. The amounts reported as the original budgeted amounts on the budgetary statements reflect the amounts on the Certificate of Estimated Resources when the original appropriations were adopted. The amounts reported as the final budgeted amounts on the budgetary statements reflect the amounts on the amended Certificate of Estimated Resources in effect at the time the final appropriations were enacted by Council.


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Note 2: Summary of Significant Accounting Policies (continued) T. Budgetary Data (continued) The Appropriation Ordinance is subject to amendment throughout the year with the restriction that appropriations cannot exceed estimated resources. The amounts reported as the original budgeted amounts reflect the first Appropriation Ordinance for that fund that covered the entire year, including encumbered amounts carried forward from prior years. The amounts reported as the final budgeted amounts represent the final appropriation amounts passed by Council during the year. U. Subsequent Events In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through July 7, 2011, the date the financial statements were available to be issued. Note 3: Change in Accounting Principles For 2010, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 51, Accounting and Financial Reporting for Intangible Assets, GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, and GASB Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. GASB Statement No. 51 established accounting and financial reporting requirements for intangible assets to reduce inconsistencies thereby enhancing the comparability of accounting and financial reporting of such assets among state and local governments. The implementation of this statement did not result in any change to the financial statements. GASB Statement No. 53 enhances the usefulness and comparability of derivative instrument information reported by state and local governments. This Statement provides a comprehensive framework for measurement, recognition, and disclosure of derivative instrument transactions. The implementation of this statement did not result in any change to the financial statements. GASB Statement No. 58 provides account and financial reporting guidance for governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. The requirements in this Statement will provide more consistent recognition, measurement, display, and disclosure guidance for governments that file for Chapter 9 bankruptcy. The implementation of this statement did not result in any change to the financial statements.


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Note 4: Budgetary Basis of Accounting While reporting financial position, results of operations, and changes in fund balance on the basis of generally accepted accounting principles (GAAP), the budgetary basis as provided by the general laws of the State of Ohio is based upon accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The Statement of Revenues, Expenditures and Changes in Fund Balance - Budget (Non-GAAP Budgetary Basis) and Actual for the General Fund and Recreation Center Fund is presented on the budgetary basis to provide a meaningful comparison of actual results with the budget. The major differences between the budget basis and the GAAP basis are as follows:

1. Revenues are recorded when received in cash (budget) as opposed to when susceptible to accrual (GAAP).

2. Expenditures are recorded when paid in cash (budget) as opposed to when the liability is

incurred (GAAP).

3. Encumbrances are treated as expenditures (budget) rather than as a reservation of fund balance (GAAP).

The following table summarizes the adjustments necessary to reconcile the GAAP basis statements to the budgetary basis statements for the General Fund and the Recreation Fund.

Net Change in Fund Balance

Recreation General Center GAAP Basis $ (927,631) $ 44,220

Net Adjustment for Revenue Accruals (35,392) (1,819)

Net Adjustment for Expenditure Accruals (613,732) (167,328)

Encumbrances (448,273) (69,351)

Budget Basis $ (2,025,028) $ (194,278)


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Note 5: Deposits and Investments The City follows the guidelines for deposit of funds set forth by the City Charter as well as certain provisions of Ohio Rev. Code Chapter 135: Uniform Depository Act. City of Rocky River, Charter, Article VII, Section 3. provides “[T]he Director of Finance may invest moneys of the City in any or all of the following: Investments consistent with the general laws of the State of Ohio in accordance with the Ohio Uniform Depository Act and any amendments thereto, bonds or notes of this City, bonds or other obligations of the United States or other obligations of any political subdivision or taxing district of the State as to which there is no default of principal or interest, in such manner as is now or hereafter provided by ordinance of Council or by the laws of the State of Ohio, and the State Treasury Asset Reserve (STAR), an investment pool managed by the Ohio Treasurer of State, as defined in Section 135.45(F)(2)(a) of the Ohio Revised Code.” Ohio Revised Code Section 135.01 classifies public money of the City into three categories: 1) active deposits; 2) inactive deposits and 3) interim deposits. The City maintains active and interim deposits only. Deposits Custodial credit risk is the risk that in the event of bank failure, the City’s deposits may not be returned from the depository. Protection of the City’s deposits is provided by the Federal Deposit Insurance Corporation (FDIC), by eligible securities pledged by the financial institution as security for repayment, by surety company bonds deposited with or by a single collateral pool established by the financial institution. In accordance with Chapter 135 of the Ohio Revised Code, any public depository receiving deposits pursuant to an award of City funds shall be required to pledge security for repayment of all public moneys deposited with the institution. At year-end, the carrying amount of the City’s deposits was $17,221,976 and the bank balance was $17,546,709. Of the bank balance $4,798,319 was covered by the FDIC and $12,748,390 was uninsured. The entire uninsured bank balance was collateralized with securities held by pledging institutions’ agents in its collateral pool. Investments Investments are reported at fair value. As of December 31, 2010, the City has $350,027 in STAROhio. Interest Rate Risk arises because potential purchasers of debt securities will not agree to pay face value for those securities if interest rates subsequently increase. The City Charter addresses interest rate risk requiring that the City’s investment portfolio be structured so that securities mature to meet cash requirements for ongoing operations and/or long-term debt payments, thereby avoiding that need to sell securities on the open market prior to maturity and by investing operating funds primarily in short-term investments. The Ohio Revised Code Chapter 135 also limits security purchases to those that mature five years unless specifically matched to a specific cash flow.


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Note 5: Deposits and Investments (continued) Investments (continued) Custodial Risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the City will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. All financial institutions and broker/dealers who desire to become qualified for investment transactions with the City must meet a set of standards prescribed by Ohio Revised Code Chapter 135 and be periodically reviewed. Credit Risk is addressed by the City’s Charter by the requirements that all investments are authorized by Ohio Revised Code and that the portfolio be diversified both by types of investment and issuer. Concentration of Credit Risk is defined by GASB as five percent or more in the securities of a single issuer. The City’s Charter provides for diversification of the portfolio but does not indicate specific percentage allocations. Note 6: Property Taxes Property taxes include amounts levied against real and public utility located in the City. Property tax revenue received during 2010 represents collections of the 2009 taxes. 2010 real property taxes were levied after October 1, 2010, on the assessed value as of January 1, 2010, the lien date. Assessed values are established by Ohio Revised Code at 35 percent of appraised value. 2010 real property taxes are collected in and intended to finance 2011. Public utility tangible personal property currently is assessed at varying percentages of true value; public utility real property is assessed at 35 percent of true value. 2010 public utility property taxes which became a lien December 31, 2009, were levied after October 1, 2010, and were collected in 2010 with real property taxes. In June 2005, House Bill No. 66 (HB 66), a budget bill that included major changes to the State of Ohio tax code, was enacted. One provision of HB 66 was the elimination of the tangible personal property tax; machinery and equipment installed or first used in business after December 31, 2004 was immediately exempt from personal property taxation and the tax on existing machinery and equipment was be phased out by January 1, 2009. HB 66 also provided local governments, including the City, to receive reimbursements for the lost tax revenue. The reimbursements began in 2006 and will continue through 2018. During a hold-harmless period of 2006 through 2010, the City will be fully compensated by the State of Ohio for the reduced tax revenue resulting from the elimination of the tangible personal property tax; from 2011 through 2018, with certain exceptions, the reimbursements will be phased-out. The reimbursed amounts only are reported as Intergovernmental Revenue.


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Note 6: Property Taxes (continued) The full tax rate for all City operations for the year ended December 31, 2010, was $10.90 per $1,000 of assessed value. The full rate for the City is the same as the effective rate. The assessed values of real and public utility upon which 2010 property tax receipts were based as follows: Category Assessed Value Real Property $ 686,743,340 Public Utility Real 6,392,090 Total $ 693,135,430

Real property taxes are payable annually or semi-annually. If paid annually, payment is due December 31; if paid semi-annually, the first payment is due December 31, with the remainder payable by June 20. Under certain circumstances, Ohio Revised Code permits later payment dates to be established.

The Cuyahoga County Treasurer collects property taxes on behalf of all taxing districts in the County, including the City. The County Auditor periodically remits to the City its portion of the taxes. Property taxes receivable represents real and tangible personal property taxes, public utility taxes and outstanding delinquencies which are measurable as of December 31, 2010 and for which there is an enforceable legal claim. In the governmental funds, the entire receivable has been offset by deferred revenue since current taxes were not levied to finance 2010 operations and the collection of delinquent taxes during the available period is not subject to reasonable estimation. On a full accrual basis, collectible delinquent property taxes have been recorded as a receivable and a revenue while on the modified accrual basis the revenue is deferred.


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Note 7: Income Taxes The City levies a municipal income tax of 1.5 percent on substantially all income earned within the City. In addition, residents of the City are required to pay the City income tax on income earned outside the City; however, a credit is allowed for income taxes paid to other municipalities which reduces the effective tax rate to 0.5 percent for such earnings. Employers within the City are required to withhold income tax on employee compensation and remit the tax to the City either monthly or quarterly. Corporations and other individual taxpayers must pay their estimated tax quarterly and file a declaration annually. All income tax monies are credited to the General Fund. By contractual agreement, the Central Collection Agency, a division of the City of Cleveland, administers and collects income taxes for the City. Amounts collected are remitted monthly to the City. Collection fees for 2010 were $329,921. Note 8: Receivables Receivables at December 31, 2010, consisted of taxes, accounts (billings for user charged services), special assessments, interest, and intergovernmental receivables. All receivables recorded are deemed collectible in full, as they are recorded net of an allowance for uncollectible portions. The allowance is based on aged accounts receivable and current year revenues. The City has approximately $4,000 in uncollectible billings for user charged services. Special assessments expected to be collected beyond one year amount to $510,000 in the special assessment bond retirement fund. The amount of delinquent special assessments outstanding is $156,000 at December 31, 2010.


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Note 9: Capital Assets A summary of changes in capital assets during 2010 follows: Balance Balance 12/31/09 Additions Deletions 12/31/10 Governmental Activities Capital Assets not Being Depreciated Land $ 2,017,826 $ 0 $ 0 $ 2,017,826 Land Improvements 203,158 0 0 203,158 Construction in Progress 1,892,166 1,551,397 (492,392) 2,951,171 Total Capital Assets not Being Depreciated 4,113,150 1,551,397 (492,392) 5,172,155 Capital Assets Being Depreciated Land Improvements 4,517,967 13,350 0 4,531,317 Buildings 33,730,576 0 0 33,730,576 Furniture, Fixtures and Equipment 4,123,117 263,536 0 4,386,653 Vehicles 7,433,844 242,247 (119,603) 7,556,488 Infrastructure: Roads 23,198,155 276,528 (1,126) 23,473,557 Sidewalks 732,314 130,632 0 862,946 Traffic Signals 2,670,690 0 0 2,670,690 Storm Sewers 4,599,174 106,197 (210) 4,705,161 Water Mains 6,765,062 40,496 0 6,805,558 Total Capital Assets Being Depreciated 87,770,899 1,072,986 (120,939) 88,722,946 Less Accumulated Depreciation: Land Improvements (1,006,137) (114,620) 0 (1,120,757) Building (9,891,486) (586,827) 0 (10,478,313) Furniture, Fixtures and Equipment (4,060,831) (24,788) 0 (4,085,619) Vehicles (6,207,217) (563,517) 119,603 (6,651,131) Infrastructure: Roads (15,357,988) (505,697) 1,126 (15,862,559) Sidewalks (57,612) (19,942) 0 (77,554) Traffic Signals (1,886,621) (133,554) 0 (2,020,175) Storm Sewers (1,388,767) (58,114) 210 (1,446,671) Water Mains (2,077,112) (84,229) 0 (2,161,341) Total Capital Assets Being Depreciated (41,933,771) (2,091,288) 120,939 (43,904,120) Total Capital Assets Being Depreciated, Net 45,837,128 (1,018,302) 0 44,818,826 Governmental Activities Capital Assets, Net $ 49,950,278 $ 533,095 $ (492,392) $ 49,990,981


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Note 9: Capital Assets (continued) Balance Balance 12/31/09 Additions Deletions 12/31/10 Business-Type Activities Capital Assets not Being Depreciated Land $ 39,516 $ 0 $ 0 $ 39,516 Right of Way 250,000 0 0 250,000 Construction in Progress 1,035,202 1,501,035 (639,455) 1,896,782 Total Capital Assets not Being Depreciated 1,324,718 1,501,035 (639,455) 2,186,298 Capital Assets Being Depreciated Furniture, Fixtures and Equipment 67,522 45,721 0 113,243 Vehicles 540,859 0 0 540,859 Sewer Lines 21,756,337 533,258 (787) 22,288,808 Total Capital Assets Being Depreciated 22,364,718 578,979 (787) 22,942,910 Less Accumulated Depreciation Furniture, Fixtures and Equipment (35,788) (15,048) 0 (50,836) Vehicles (528,445) (6,024) 0 (534,469) Sewer Lines (5,093,613) (290,567) 787 (5,383,393) Total Capital Assets Being Depreciated (5,657,846) (311,639) 787 (5,968,698) Total Capital Assets Being Depreciated, Net 16,706,872 267,340 0 16,974,212 Total Business-Type Activities Capital Assets, Net $ 18,031,590 $ 1,768,375 $ (639,455) $ 19,160,510 *Depreciation expense was charged to governmental functions as follows:

General Government $ 118,607 Security of Persons and Property 369,201 Public Health 43,517 Transportation 606,057 Community Development 18,599 Basic Utility Service 421,616 Leisure Time Activities 513,691 Total $ 2,091,288


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Note 10: Joint Venture - Rocky River Wastewater Treatment Plant

The Rocky River Wastewater Treatment Plant (Plant) is a joint venture among the cities of Rocky River, Bay Village, Fairview Park and Westlake. The Plant is governed by a management committee consisting of the elected mayors of the four member cities and a fifth person nominated and elected by the mayors. The committee has authority over all aspects of the Plant’s operation. The Plant supplies all participating residents of the member cities with sanitary sewer services. Each city owns the sewage lines located in its city and bills its residents for usage. Continued existence of the Plant is dependent on the City's continued participation, and the City does have an equity interest in the Plant. The City's equity interest is $5,821,706 which represents 25.43 percent of the total equity in the Plant. The Plant is not accumulating significant financial resources or experiencing fiscal stress which would cause additional financial benefit to or burden on the City. Complete financial statements can be obtained from the Director of Finance, City of Rocky River, 21012 Hilliard Boulevard, Rocky River, Ohio 44116, who serves as fiscal agent. Note 11: Related Party Transactions Since the continued existence of the Plant is dependent upon the participation of each member city, all transactions between the Plant and each member city are considered related party transactions. The Plant’s transactions during 2010 involving the City of Rocky River, are summarized as follows: A. Charges for Services and Contributions for Capital Assets Replacement Fund Charges for services revenue for 2010 consists of amounts charged to the member cities for wastewater treatment services provided to the member cities’ residents and contributions to the Plant for plant and equipment replacement, as follows: Charges for Services Contributions Rocky River $ 1,080,750 $ 161,735 As of December 31, 2010, the City of Rocky River owed the Plant $216,150 for the charges discussed above which is recorded as Accounts Payable. B. Lease of Land The Plant is located on property of the City. The organizing agreement (as amended) provides for an annual lease payment of $57,000 from the Plant for the land.


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Note 12: Risk Management The City is exposed to various risks related to damage to, theft of and destruction of assets; torts; errors and omissions; natural disasters; and injuries to employees. During 2010, the City obtained insurance coverage with private insurance carriers to address exposure to certain of these risks. There has not been a significant reduction in coverage from the prior year and settled claims have not exceeded coverage in any of the past three years. Protection for employees injured while at work is provided through the two agencies of the State of Ohio: the Bureau of Workers’ Compensation (BWC) and the Industrial Commission of Ohio (IC). The BWC has the administrative and insurance function, collecting workers’ compensation insurance premiums from employers, and overseeing compensable claims of injured workers. The IC is the claims adjudicative branch that resolves disputes arising from a workers’ compensation claim. Also, the City has contracted with a third party administrator and a managed care organization to provide case management, consulting and administrative services. Since May 2002, the City has provided employees (and eligible dependents) medical and prescription drug benefits on a partially self-insured basis; dental benefits are provided on a fully insured basis. The City contracts with a third party administrator to process and pay claims and has obtained stop loss coverage for claims individual and aggregate per year claims. The City pays a monthly premium into the Self Insurance Fund for each employee that varies according to employee group. These rates are paid by the fund from which the employees’ salary is paid. Incurred but not reported claims of $107,473 have been accrued as a liability at December 31, 2010 based on an estimate by the third party administrator.

Changes in the fund's claims liability amount were: Balance at Current Year Claim Balance at Beginning of Year Claims Payments End of Year 2006 $ 76,204 $ 1,593,421 $ 1,544,522 $ 125,103 2007 125,103 1,566,834 1,531,017 160,920 2008 160,920 2,226,471 2,100,829 286,562 2009 286,562 1,494,393 1,690,461 90,484 2010 90,484 1,800,064 1,783,075 107,473


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Note 13: Defined Benefit Pension Plans A. Ohio Public Employees Retirement System The City participates in the Ohio Public Employees Retirement System (OPERS). OPERS administers three separate pension plans: the traditional plan, the member directed plan and the combined plan. The traditional plan is a cost-sharing, multiple-employer defined benefit pension plan. The member-directed plan is a defined contribution plan in which the member invests both member and employer contributions (employer contributions vest over five years at 20% per year). Under the member directed plan, members accumulate retirement assets equal to the value of the member and vested employer contributions plus any investment earnings. The combined plan is a cost-sharing, multiple-employer defined benefit pension plan that has elements of both a defined benefit and a defined contribution plan. Under the combined plan, OPERS invests employer contributions to provide a formula retirement benefit similar in nature to, but less than, the traditional plan benefit. Member contributions, the investment of which is self-directed by the members, accumulate retirement assets in a manner similar to the member directed plan. OPERS provides retirement, disability, survivor and death benefits and annual cost of living adjustments to members of the traditional and combined plans. Members of the member directed plan do not qualify for ancillary benefits. Authority to establish and amend benefits is provided by Chapter 145 of the Ohio Revised Code. OPERS issues a stand-alone financial report that may be obtained by writing to OPERS, 277 E. Town St., Columbus, OH 43215-4642 or by calling (614) 222-5601 or 800-222-7377. For 2010, the members and employer contribution rates were consistent across all three plans. For the year ended, December 31 2010, the members of all three plans were required to contribute 10.0 percent of their annual covered salary to fund pension obligations. The City contributed 14.0 percent of covered payroll, of which 5.5 percent from January 1 through February 28 and 5.0 percent from March 1 through December 31 was used to fund health care coverage for retirees. The contribution rate is determined actuarially. The Ohio Revised Code provides statutory authority for member and employer contributions. The City’s required contributions for pension obligations, excluding the health care portion, to the traditional and combined plans for the years ended December 31, 2010, 2009, and 2008 were $867,293, $752,579, and $664,080, respectively; 86.57 percent has been contributed for 2010, 100 percent for 2009 and 2008. Contributions to the member-directed plan for 2010 were $25,303 made by the City and $18,073 made by the plan members. B. Ohio Police and Fire Pension Fund The City contributes to the Ohio Police and Fire Pension Fund (OP&F), a cost-sharing multiple-employer defined benefit pension plan. The OP&F provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by the Ohio State Legislature and are codified in Chapter 742 of the Ohio Revised Code. The OP&F issues a publicly available financial report that includes financial information and required supplementary information for the plan. That report may be obtained by writing to OP&F, 140 East Town Street, Columbus, Ohio 43215-5164.


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Note 13: Defined Benefit Pension Plans (continued) B. Ohio Police and Fire Pension Fund (continued) Plan members are required to contribute 10 percent of their annual covered salary, while employers are required to contribute 19.5 percent for police officers and 24 percent for firefighters. Contributions are authorized by State statute. The City’s contributions, excluding the health care portion, for the years ended December 31, 2010, 2009, and 2008 for police officers were $357,644, $335,592, and $329,033 and for firefighters were $414,062, $391,185, and $373,526, respectively, equal to the required contributions for each year. The full amount has been contributed for years 2008 and 2009, and 73.95% and 73.25% has been contributed for 2010 for police and firefighters, respectively. Note 14: Postemployment Benefits A. Ohio Public Employees Retirement System OPERS maintains a cost-sharing multiple employer defined benefit post-employment healthcare plan, which includes a medical plan, prescription drug program and Medicare Part B premium reimbursement, to qualifying members of both the traditional pension and the combined plans. Members of the member-directed plan do not qualify for ancillary benefits, including post-employment health care coverage. In order to qualify for post-retirement health care coverage, age and service retirees under the traditional pension and combined plans must have 10 or more years of qualifying service credit. Health care coverage for disability recipients and qualified survivor recipients is available. The health care coverage provided by OPERS meets the definition of an Other Post-Employment Benefit (OPEB) as described in GASB Statement No. 45. The Ohio Revised Code permits, but does not mandate, OPERS to provide OPEB benefits to its eligible members and beneficiaries. Authority to establish and amend benefits is provided in Chapter 145 of the Ohio Revised Code. OPERS issues a stand-alone financial report that may be obtained in writing to OPERS, 227 E. Town St., Columbus, OH, 43215-4642, or by calling (614)222-5601 or 800-222-7377. The Ohio Revised Code provides statutory authority requiring employers to fund post-retirement health care through their contributions to OPERS. A portion of each employer’s contribution to OPERS is set aside for the funding of post-retirement health care. Employer contribution rates are expressed as a percentage of the covered payroll of active members. In 2010, the City contributed at a rate of 14.0 percent of covered payroll. The Ohio Revised Code currently limits the employer contribution to a rate not to exceed 14.0 percent of covered payroll for state and local employer units. Active members do not make contributions to the OPEB plan. OPERS’ Post Employment Health Care plan was established under, and is administered in accordance with, Internal Revenue Code 401(h). Each year, the OPERS Board of Trustees determines the portion of the employer contribution rate that will be set aside for funding of the post employment health care benefits. For 2010, the employer contribution allocated to the health care plan for members in the Traditional Plan was 5.5 percent from January 1 through February 28 and 5.0 percent from March 1 through December 31 of covered payroll. The employer contribution allocated to the health care plan for members in the Combined Plan was


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Note 14: Postemployment Benefits (continued) A. Ohio Public Employees Retirement System (continued) 4.73 percent from January 1 through February 28 and 4.23 percent from March 1 through December 31 of covered payroll. The OPERS Board of Trustees is also authorized to establish rules for the payment of a portion of the health care benefits provided, by the retiree or their surviving beneficiaries. Payment amounts vary depending on the number of covered dependents and the coverage selected. The City’s contributions allocated to fund post-employment health care benefits for the years ended December 31, 2010, 2009, and 2008 were $495,719, $550,501, and $664,080, respectively; 86.57 percent has been contributed for 2010, 100 percent has been contributed for 2009 and 2008. The Health Care Preservation Plan (HCPP) adopted by the OPERS Board of Trustees on September 9, 2004, was effective January 1, 2007. Member and employer contribution rates increased as of January 1 of each year from 2006 to 2008. These rate increases allowed additional funds to be allocated to the health care plan. B. Ohio Police and Fire Pension Fund The City contributes to the Ohio Police and Fire Pension Fund (OP&F) sponsored health care program, a cost-sharing multiple-employer defined postemployment health care plan administered by the OP&F. OP&F provides healthcare benefits including coverage for medical, prescription drugs, dental, vision, Medicare Part B Premium and long term care to retirees, qualifying benefit recipients and their eligible dependents. OPP&F provides access to post-retirement health care coverage for any person who receives or is eligible to receive a monthly service, disability, or survivor benefit check or is a spouse or eligible dependent child of such person. The health care coverage provided by OP&F meets the definition of an Other Post Employment Benefit (OPEB) as described in GASB Statement 45. The Ohio Revised Code allows, but does not mandate OP&F to provide OPEB benefits. Authority for the OP&F Board of Trustees to provide health care coverage to eligible participants and to establish and amend benefits is codified in Chapter 742 of the Ohio Revised Code. OP&F issues a publicly available financial report that includes financial information and required supplementary information for the Plan. That report may be obtained by writing to the Pension Fund, Attention: Chief Financial Officer, 140 E. Town St., Columbus, Ohio 43215-5164. The Ohio Revised Code provides for contribution requirements of the participating employers and of the plan members to the OP&F (defined benefit pension plan). Participating employers are required to contribute to the pension plan at rates expressed as percentages of the payroll of active pension plan members, currently, 19.5 percent and 24.0 percent of covered payroll for police and fire employers, respectively. The Ohio revised Code states that the employer contribution may not exceed 19.5 percent of the covered payroll for police employer units and 24.0 percent of covered payroll for fire employer units. Active members do not make contributions to the OPEB Plan.


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Note 14: Postemployment Benefits (continued) B. Ohio Police and Fire Pension Fund (continued) OP&F maintains funds for health care in two separate accounts. One for health care benefits under an IRS Code Section 115 trust and one for Medicare Part B reimbursements administered as an Internal Revenue Code 401(h) account, both of which are within the defined benefit pension plan, under the authority granted by the Ohio Revised Code to the OP&F Board of Trustees. The Board of Trustees is authorized to allocate a portion of the total employer contributions made into the pension plan to the Section 115 trust and the Section 401(h) account as the employer contribution for retiree health care benefits. For the year ended December 31, 2010, the employer contribution allocated to health care plan was 6.75 percent of covered payroll. The amount of employer contributions allocated to the health care plan each year is subject to the Trustees’ primary responsibility to ensure that pension benefits are adequately funded and is limited by the provisions of Sections 1150 and 401(h). The OP&F Board of Trustees also is authorized to establish requirements for contributions to the health care plan by retirees and their eligible dependents, or their surviving beneficiaries. Payment amounts vary depending on the number of covered dependents and the coverage selected. The City’s total contributions to OP&F for police and fire for the years ending December 31, 2010, 2009, and 2008 were $546,985, $513,258, and $503,227 and $576,086, $544,258, and $519,688, respectively, of which $189,341, $177,666, and $174,194 and $162,024, $153,073, and $146,162, respectively, was allocated to the healthcare plan. The full amount has been contributed for 2009 and 2008. For 2010, 73.95 percent for police and 73.25 percent for firefighters has been contributed, with the remainder being reported as a liability. Note 15: Compensated Absences The criteria for determining vacation and sick leave benefits are derived from negotiated agreements, Ohio Revised Code and city ordinances. Vacation leave is earned at rates which vary depending upon length of service and standard work week. Vacation accumulation is limited to two years. Vacation leave not used within two years is eliminated from the employee's leave balance. All accumulated unused vacation time is paid upon termination of employment. Employees earn sick leave at the rate of 2.3 hours for every forty hours worked, except for the fire division where employees earn 9.69 hours for every 168 hours worked. Sick leave accumulation is limited to 960 hours, except for the fire division where a maximum of 1,341 hours may be accumulated. City employees with two or more years of service are paid for their accumulated sick leave upon termination or retirement.


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Note 16: Conduit Debt West Shore Unitarian Universalist Church In October 2005, the City issued $1,350,000 Economic Development Revenue Bonds, Series 2005 (Bonds) pursuant to a Loan Agreement dated October 3, 2005 between the City and the West Shore Unitarian Universalist Church (the Borrower). The Bonds were issued for the purpose of making a loan to the Borrower, an Ohio nonprofit corporation to acquire, construct, renovate, furnish and equip an approximately 12,000 square foot area of the Borrower’s facility at 20401 Hilliard Boulevard, Rocky River, which will be used by the Borrower, acting as the “West Shore Child Care Center” in its operation of day care and pre-school facilities. The Bond Service Charges are payable from revenue assigned to secure such payment are not payable from other funds of the City whether raised by taxation or otherwise received. Accordingly, the Bonds are not reported as a liability of the City in the accompanying financial statements. The Bonds are payable in 240 monthly payments from November 1, 2005 through October 1, 2025 inclusive. Original Interest Outstanding Date of Description Issue Rate 12/31/10 Maturity Economic Development Revenue Bonds, Series 2005 $ 1,350,000 Variable $ 1,120,456 October 1, 2025 Note 17: Long-Term Obligations The original issue date, interest rate, original issue amount and date of maturity of each of the City’s bonds and loans follows: Interest Original Date of Debt Issue Rate Issue Amount Maturity General Obligation Bonds 2005 Civic Facility Improvements 2.50-4.00% $ 8,400,000 December 1, 2024 2002 Municipal Court Facility 3.00-4.75 3,700,000 December 1, 2026 2004 General Purpose 2.00-5.00 10,840,000 December 1, 2024

Special Assessment Bonds 2000 Erosion Control (B) 5.00-5.50 360,000 December 1, 2025 1998 Erosion Control (A) 4.75-5.10 605,000 December 1, 2023

OPWC Loans Valley View Storm and Sanitary Sewer 0.00 NA January 1, 2041 Hampton Road Storm and Sanitary Sewer 0.00 NA January 1, 2043

OWDA Loan 2000 Sewer Repair 4.64 328,239 July 1, 2020

NA – Final amount of loan has not been finalized.


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Note 17: Long-Term Obligations (continued) The changes in long-term obligations during the year were as follows:

Amount Outstanding Outstanding Due in 12/31/09 Additions Reductions 12/31/10 One Year Governmental Activities General Obligation Bonds 2005 Civic Facility Improvements $ 6,875,000 $ 0 $ 345,000 $ 6,530,000 $ 355,000 2002 Municipal Court Facility 2,990,000 0 115,000 2,875,000 120,000 2004 General Purpose 7,670,000 0 610,000 7,060,000 615,000 Unamortized Premium 342,319 0 22,821 319,498 0 Total General Obligation Bonds 17,877,319 0 1,092,821 16,784,498 1,090,000 Special Assessment Bonds 2000 Erosion Control (B) 240,000 0 15,000 225,000 15,000 1998 Erosion Control (A) 350,000 0 25,000 325,000 25,000 Total Special Assessment Bonds 590,000 0 40,000 550,000 40,000 Ohio Public Works Commission (OPWC) Loans Valley View Storm and Sanitary Sewer Improvement 228,754 469,041 0 697,795 0

Hampton Road Storm and Sanitary Sewer Improvement 0 176,975 0 176,975 0 Total OPWC Loans 228,754 646,016 0 874,770 0

Compensated Absences Payable 4,186,930 1,556,760 1,556,529 4,187,161 546,955 Police and Fire Pension Liability 549,685 0 28,080 521,605 29,286 Total Governmental Activities $ 23,432,688 $ 2,202,776 $ 2,717,430 $ 22,918,034 $ 1,706,241 Business Type Activities OWDA Loan $ 231,400 $ 0 $ 16,550 $ 214,850 $ 17,327 Compensated Absences Payable 117,664 47,736 37,875 127,525 18,104 Total Business Type Activities $ 349,064 $ 47,736 $ 54,425 $ 342,375 $ 35,431


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Note 17: Long-Term Obligations (continued) General purpose general obligation bonds will be paid from property taxes and money transferred to the Debt Service Fund. Municipal Court Facility general obligation bonds will be paid from the Municipal Court Capital Improvement Fund. The special assessment bonds will be paid from the proceeds of special assessments levied against benefited property owners. In the event that property owners fail to make their special assessment payments, the City is responsible for providing the resources to meet the annual principal and interest payments. The police and fire pension liability will be paid from levied taxes in the Police and Fire Pension special revenue funds. Compensated absences will be paid from the general fund, the recreation center, office on aging, refuse and recycling, motor vehicle license tax and street construction and repair special revenue funds, and the sanitary sewer enterprise fund. The OWDA loan reported in the Sanitary Sewer Enterprise Fund will be paid from revenues derived by the City from sanitary sewer charges. During 2009, the City obtained an Ohio Public Works Commission (OPWC) loan for the Valley View Storm and Sanitary Sewer Improvements to be repaid in semi-annual principal payments of approximately $49,795 beginning in July 2011 for an estimated 30 years. OPWC has authorized this loan up to $2,987,712. The above represents the monies drawn against this loan and as a result, the debt maturity schedule below does not reflect any amount for principal. When the loan is finalized, the principal will be included below. Also during 2009, the City obtained a second Ohio Public Works Commission (OPWC) loan for the Hampton Road Storm and Sanitary Sewer Improvements to be repaid in semi-annual principal payments of approximately $63,112 beginning in July 2013 for an estimated 30 years. OPWC has authorized this loan up to $3,786,720. The above represents the monies drawn against this loan and as a result, the debt maturity schedule below does not reflect any amount for principal. When the loan is finalized, the principal will be included below. During 2010, the City obtained an OPWC loan for the Frazier Drive Improvements to be repaid in semi-annual principal payments of approximately $54,619 beginning in July 2014 for an estimated 30 years. OPWC has authorized this loan up to $3,277,120. No draws have been made against this loan and as a result, the debt maturity schedule below does not reflect any amount for principal. When the loan is finalized, the principal will be included below.


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Note 17: Long-Term Obligations (continued) The City's overall legal debt margin was $54,843,755 at December 31, 2010. Principal and interest requirements to retire long-term obligations outstanding at December 31, 2010, are as follows: Total General Obligation Bonds Special Assessment Bonds Police and Fire Pension Governmental Activities Principal Interest Principal Interest Principal Interest Principal Interest 2011 $ 1,090,000 $ 725,818 $ 40,000 $ 28,450 $ 29,286 $ 21,860 $ 1,159,286 $ 776,128 2012 1,105,000 691,918 40,000 26,463 30,544 20,603 1,175,544 738,984 2013 1,125,000 655,250 40,000 24,475 31,855 19,291 1,196,855 699,016 2014 1,155,000 613,475 40,000 22,475 33,224 17,922 1,228,224 653,872 2015 930,000 569,413 40,000 20,463 34,651 16,495 1,004,651 606,371 2016-2020 5,310,000 2,130,326 200,000 71,163 171,671 59,034 5,681,672 2,260,523 2021-2025 5,290,000 752,400 150,000 20,025 66,339 34,355 5,506,339 806,780 2026-2030 460,000 33,013 0 0 81,864 18,831 541,864 51,844 2031-2035 0 0 0 0 42,171 2,490 42,171 2,490 Total $ 16,465,000 $ 6,171,613 $ 550,000 $ 213,514 $ 521,605 $ 210,881 $ 17,536,606 $ 6,596,008

Business Type Activity OWDA Loan Principal Interest 2011 $ 17,327 $ 9,771 2012 18,140 8,956 2013 18,992 8,106 2014 19,884 7,214 2015 20,817 6,281 2016-2020 119,690 15,798 Total $ 214,850 $ 56,126

Note 18: Litigation The City management is of the opinion that ultimate disposition of claims and legal proceedings will not have a material effect, if any, on the financial condition of the City. Note 19 : Jointly Governed Organizations A. West Shore Council of Governments The West Shore Council of Governments (West Shore Council) was organized pursuant to Ohio Revised Code Section 167.01 by the Ohio cities of Rocky River, Bay Village, Fairview Park, Lakewood, North Olmsted and Westlake. The West Shore Council was formed to foster cooperation between members in the areas of public health, welfare, police protection, fire protection and regional development. The West Shore Council oversees both the West Shore Hazardous Materials Committee which provides hazardous material handling training, protection and assistance and the West Shore Enforcement Bureau which provides SWAT Team training, protection and assistance.


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Note 19 : Jointly Governed Organizations A. West Shore Council of Governments (continued) The West Shore Council is governed by a board comprised of one member from each member city. The board exercises control over the operation of the West Shore Council including budgeting, appropriating, contracting and administration. The West Shore Council board adopts an annual budget governing its activities for that year. Each city's degree of control is limited to its representation on the board. In 2010, the City contributed $38,220 to the West Shore Council. Financial information for the West Shore Council may be obtained from the Director of Finance, City of Bay Village, 350 Dover Center Road, Bay Village, Ohio 44140, who serves as fiscal agent. B. Tri-City Park Council of Governments The Tri-City Park Council of Governments (Tri-City Park) was organized pursuant to Ohio Revised Code Section 167.01 by the Ohio cities of Rocky River, Fairview Park and Westlake. Tri-City Park was formed to operate a public park to which residents of all member cities have access and which is bordered by all member cities. Tri-City Park is governed by a board comprised of one member from each member city. The board exercises control over the operation of Tri-City Park including budgeting, appropriating, contracting and administration. The Tri-City Park board adopts an annual budget governing its activities for that year. Each city's degree of control is limited to its representation on the board. In 2010, the City contributed $2,000 to the Tri-City Park Council. Financial information for Tri-City Park may be obtained from the Director of Finance, City of Rocky River, 21012 Hilliard Boulevard, Rocky River, Ohio 44116, who serves as fiscal agent. C. S.A.F.E. Council of Governments The Safe Air for the Environment Council of Governments (SAFE Council) was organized pursuant to Ohio Revised Code Section 167.01 by the Ohio cities of Rocky River, Bay Village, Fairview Park and Westlake. The SAFE Council was formed to oppose and to monitor changes to air traffic patterns of flights from nearby Cleveland Hopkins International Airport. The SAFE Council is governed by a board comprised of one member from each member city. The board exercises control over the operation of the SAFE Council including budgeting, appropriating, contracting and administration. The SAFE Council board adopts an annual budget governing its activities for that year. Each city's degree of control is limited to its representation on the board. The City made no contributions to the SAFE Council in 2010. Financial information for the SAFE Council may be obtained from the Director of Finance, City of Rocky River, 21012 Hilliard Boulevard, Rocky River, Ohio 44116, who serves as fiscal agent.


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Note 19 : Jointly Governed Organizations (continued) D. Suburban Water Regional Council of Governments The Suburban Water Regional Council of Governments (Water Council) was organized in 2003 pursuant to Ohio Revised Code Section 167.01 by the political subdivisions to which the City of Cleveland, Ohio sells water, either by direct service to residents or on a bulk basis. The Water Council was formed to represent such political subdivisions in communications, understandings, uniform approaches and exchange of information between the members of the Water Council and the City of Cleveland, Ohio. The Water Council is governed by a Board of Trustees elected from each of nine member groups defined in the organizing agreement. The Mayor represents the City and is eligible to be elected to the Board of Trustees of the Water Council. The City made no contributions to the Water Council in 2010. The organizing agreement provides for the assessment of dues to members; however, no dues have been assessed since the inception of the Water Council. The fiscal information of the Water Council may be obtained through the office of the Executive Secretary of the Cuyahoga County Mayors and Managers Association located at 10107 Brecksville Road, Brecksville, Ohio 44141, who serves as the fiscal agent.

Note 20: Interfund Activity A. Transfers The transfers among City funds were made to provide additional resources for current operations and for the payment of debt. Transfers made during the year ended December 31, 2010 were as follows:

Transfer from General Sewer Fund Total Transfer to Recreation Center $ 600,000 $ 0 $ 600,000 General Obligation Bond Retirement 731,000 0 731,000 Capital Improvements 600,000 0 600,000 Other Governmental Funds 2,540,000 0 2,540,000 Subtotal Fund Transfers 4,471,000 0 4,471,000 Governmental Activities 0 106,197 106,197 Total Transfers $ 4,471,000 $ 106,197 $ 4,577,197 B. Receivable/Payable During the year ended December 31, 2008, the General Fund advanced the Recreation Center Special Revenue Fund $500,000, which created an Interfund Receivable / Payable. The advance was for monies that are expected to be repaid by December 31, 2011. No payments have been made during 2010.


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Note 21: Contractual Commitments At December 31, 2010, the City’s significant contractual commitments consisted of:

Contract Amount Remaining Project Amount Paid on Contract Court Computer Equipment Purcahse $ 184,529 $ 97,786 $ 86,743 Elmwood Road Sewer Rehabilitation 926,417 782,283 144,134 Emergency Sewer Repairs 100,000 55,311 44,689 Hampton Road Watermain Rehabilitation 136,125 120,480 15,645 Lake Road Reconstruction 1,473,690 567,281 906,409 Salt Barn 196,224 0 196,224 Sanitary Sewer Engineering 599,237 434,030 165,207 Schlather Lane Slope Repair 70,000 0 70,000 Sewer Televising 75,000 70,967 4,033 Social Services Contract 29,000 12,200 16,800 Street, Sidewalk, and Curb Repair 100,000 62,081 37,919 Valley View Sewer Rehabilitation 3,485,576 180,844 3,304,732 Total $ 7,375,798 $ 2,383,263 $ 4,992,535 The amounts captioned “Remaining on Contract” are encumbered as of the end of the year. Note 22: Accountability and Compliance A. Accountability Fund Equity Deficit – Special Revenue Funds There are deficits in the Recreation Center, Refuse and Recycling, Fire Levy and Police Levy Special Revenue Funds of $347,965, $6,870, $126,171 and $109,423, respectively, caused by the application of accounting principles generally accepted in the United State of America to the fund. The General Fund is liable for any deficit in the fund and provides operating transfers when cash is required, not when accruals occur. B. Compliance The following had original appropriations in excess of the original estimated resources plus available balances for 2010, contrary to Ohio Revised Code, Section 5705.39:

Estimated Resources Appropriations Excess General Fund $ 21,104,485 $ 21,577,392 $ 427,907 Special Revenue Funds: Refuse and Recycling Fund 1,689,252 1,761,854 72,602 Motor Vehicle License Tax Fund 393,030 404,508 11,478 Capital Projects Funds: Sewer Rehabilitation Fund 2,221,389 5,599,336 3,377,947 Capital Improvement Fund 1,467,903 3,890,500 2,422,597


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Note 23: Operating Leases A. Lessor In July 2007, the City entered into a five year lease agreement with Fairview Hospital (the Hospital) whereby the Hospital will operate an Outpatient Physical Therapy Center at the Don Umerley Civic Center. Total revenue from this lease in 2010 was $20,000. Future minimum rents to be received from this lease are as follows: 2011 $ 20,000 2012 11,667 $ 31,667 B. Lessee In August 2006, the City entered into a 15 year lease agreement with Beachcliff Properties L.P. to lease a parking structure at the Beachcliff Market Square to provide free public parking in the downtown retail district. The total rental expense for year ended December 31, 2010 was $40,000. In March 2009, the City entered into a 2 year lease agreement for police motorcycles. The total rental expense for year ended December 31, 2010 was $1,805. Future minimum rental payments for these leases are as follows: 2011 $ 40,301 2012 30,000 2013 20,000 2014 20,000 2015 20,000 2016-2020 100,000 $ 230,301 Note 24: Related Organization The Rocky River Community Improvement Corporation (CIC) was organized pursuant to Ohio Revised Code Chapter 1724 in October 2002 as an Ohio nonprofit corporation. The CIC was formed to advance, encourage and promote development of the City by acting as the designated agency of the City for such purposes in accordance with Ohio Revised Code Section 1724.10. The CIC is a body politic, separate from the City, which may act as an individual entity to carry out the powers conferred upon it by the general laws of the State of Ohio. The corporate code of regulations provides for a board of directors comprised of the Mayor; the members of City Council and the Directors of Community and Economic Development and Finance of the City. The Director of Finance serves as CIC Treasurer. The CIC has neither applied nor qualified for a tax exemption pursuant to any section of the Internal Revenue Code. At December 31, 2010, the CIC has no assets or liabilities. The CIC has had no financial activity since 2005.


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Note 25: Joint Economic Development Zone In 2008, pursuant to Ohio Rev. Code Section 715.69, the City entered into a 30 year agreement with 13 other cities in Cuyahoga and Lorain Counties to create and provide for the operation of a joint economic development zone (JEDZ) for the purpose of facilitating new or expanded growth for commercial or economic development. The JEDZ is known as the Nagel-Interstate 90 Joint Economic Development Zone and consists of about 791 acres in the City of Avon, Lorain County, Ohio. The agreement provides that for any business relocating to the JEDZ from the City, the City of Avon will 1) limit real estate tax abatements; 2) not provide any income tax abatements; and 3) with certain limitations, share income taxes. The agreement does not provide for a financial contribution by the City. Note 26: Subsequent Events In April 2011, the City began the process to advance refund the outstanding 2002 Municipal Court Facility General Obligation Bonds. Court officials authorized a contribution that is expected to shorten the debt service retirement schedule by about five years.

City of Rocky River, Ohio Combining Statements Non-Major Government Funds Fund Descriptions

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Non-major Special Revenue Funds Special revenue funds are used to account for proceeds of specific revenue sources (other than amounts relating to major capital projects) that are legally restricted to expenditures for specific purposes.

Law Enforcement Trust Fund - Required by the Ohio Revised Code to account for monies received from various Law Enforcement Agencies designated for law enforcement related purposes.

Community Diversion Program Fund - To account for monies received from Cuyahoga County to be used to help divert youth who are first time offenders of misdemeanor offenses from formal court action and to establish or expand community policing programs.

Indigent Driver Alcohol Treatment Fund - Required by the Ohio Revised Code to account for 50 percent of fines received by the City for convictions related to persons whose drivers license was suspended for driving under the influence of alcohol.

Enforcement and Education Fund - To account for fines imposed under Section 4511.99 (A) of the Ohio Revised Code. These monies are used to pay costs incurred in enforcing Section 4511.99 of the Ohio Revised Code, and to educate the public about laws governing the operation of a motor vehicle under the influence of alcohol and the danger thereof.

Municipal Probation Services Fund - To account for specific court costs used to maintain ongoing probation services.

Mediation Services Fund – To account for the collection of fees for all civil cases except cognovit notes and domestic relations filings pursuant to ORC 2303.201(E)(1). Federal Emergency Management Agency (FEMA) Fund – To account for Federal monies received to pay for expenses incurred during emergencies. Office on Aging Fund - To account for levied property tax revenues, charges for services and general fund subsidies used for the operation of the Senior Center.

Marine Patrol Fund - To account for monies received from the State and general fund subsidies used for the operation of the City’s police boat.

Community Impacts Fund - To account for monies received from a railroad company to be used for costs resulting from increased usage of the Nickel Plate railroad line. Refuse and Recycling Fund - To account for levied property tax revenue and general fund subsidies used for the recycling program, as well as the collection and hauling of rubbish.

(continued)

City of Rocky River, Ohio Combining Statements Non-Major Governmental Funds (Continued) Fund Descriptions

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Non-major Special Revenue Funds (continued)

Motor Vehicle License Tax Fund - Required by the Ohio Revised Code to account for monies received from Cuyahoga County for the maintenance of public roads, highways, streets and bridges within the City. Street Repair and Maintenance Fund - Required by the Ohio Revised Code to account for State gasoline tax and motor vehicle registration fees designated for maintenance of streets within the City.

State Highway Fund - Required by the Ohio Revised Code to account for State gasoline tax and motor vehicle registration fees designated for the maintenance of state highways within the City. Indigent Driver Alcohol Monitoring (IDAM) Fund - To account for mandatory minimum fine amounts established pursuant to Ohio Rev. Code Section 4511.19(G)(5)(e) for operating a vehicle under the influence of alcohol or drugs. Fire Levy Fund - This fund accounts for a voted real estate tax operating levy which pays for the current and accrued past service liability for fire disability and pension benefits.

Police Levy Fund - This fund accounts for a voted real estate tax operating levy which pays for the current and accrued past service liability for police disability and pension benefits.

Non-major Debt Service Funds

Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term and special assessment principal, interest and related costs.

Special Assessment Bond Retirement Fund - To account for the collection of special assessments levied against the benefited properties for the payment of special assessment bonds and related interest. Non-major Capital Projects Fund

Capital projects funds are established to account for financial resources to be used for the construction or acquisition of major capital facilities (other than those financed by proprietary funds). Equipment Replacement Fund - To account for liquor permit revenues and transfers to provide for the future replacement of equipment. Municipal Court Capital Improvement Fund - To account for specific court costs created to maintain operating and capital needs of the Municipal Court.

City of Rocky River, Ohio Combining Balance Sheet Non-Major Governmental Funds December 31, 2010

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Non-major Non-major Non-major Total Special Debt Capital Non-major Revenue Service Projects Governmental Funds Fund Funds Funds Assets: Equity in Pooled Cash and Cash Equivalents $ 1,412,553 $ 2,838 $ 2,252,275 $ 3,667,666 Accrued Interest Receivable 54 0 165 219 Accounts Receivable 22,293 0 54,003 76,296 Intergovernmental Receivable 456,743 0 4,060 460,803 Materials and Supplies Inventory 152,573 0 0 152,573 Taxes Receivable 1,271,948 0 0 1,271,948 Special Assessments Receivable 0 705,983 0 705,983 Total Assets $ 3,316,164 $ 708,821 $ 2,310,503 $ 6,335,488 Liabilities and Fund Balances: Liabilities: Accounts Payable $ 188,701 $ 0 $ 14,545 $ 203,246 Accrued Wages and Benefits 29,671 0 434 30,105 Intergovernmental Payable 390,739 352 7,278 398,369 Deferred Revenue 1,598,322 705,983 0 2,304,305 Total Liabilities 2,207,433 706,335 22,257 2,936,025 Fund Balances: Reserve for Encumbrances 183,734 0 103,465 287,199 Reserve for Inventory 152,573 0 0 152,573 Unreserved, Undesignated, Reported In: Special Revenue Funds 772,424 0 0 772,424 Debt Service Fund 0 2,486 0 2,486 Capital Projects Funds 0 0 2,184,781 2,184,781 Total Fund Balances 1,108,731 2,486 2,288,246 3,399,463 Total Liabilities and Fund Balances $ 3,316,164 $ 708,821 $ 2,310,503 $ 6,335,488

City of Rocky River, Ohio Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Governmental Funds For The Year Ended December 31, 2010

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Non-major Non-major Non-major Total Special Debt Capital Non-major Revenue Service Projects Governmental Funds Fund Funds Funds Revenues: Property Taxes $ 1,291,133 $ 0 $ 0 $ 1,291,133 Intergovernmental 1,070,920 0 823,491 1,894,411 Charges for Services 484,158 0 0 484,158 Fees, Fines and Permits 280,587 0 54,003 334,590 Special Assessments 0 61,788 0 61,788 Investment Income 413 0 3,815 4,228 Other 5,611 0 0 5,611 Total Revenues 3,132,822 61,788 881,309 4,075,919 Expenditures: Current: Security of Persons and Property 1,400,769 0 0 1,400,769 Public Health 1,298,805 0 0 1,298,805 Basic Utility Service 1,555,516 0 0 1,555,516 Transportation 1,552,567 0 0 1,552,567 General Government 23,541 0 0 23,541 Capital Outlay 76,200 0 736,788 812,988 Debt Service: Principal Retirement 28,080 40,000 115,000 183,080 Interest and Fiscal Charges 25,092 31,401 138,713 195,206 Total Expenditures 5,960,570 71,401 990,501 7,022,472 Excess of Revenues Over (Under) Expenditures (2,827,748) (9,613) (109,192) (2,946,553) Other Financing Sources (Uses): Transfers – In 2,440,000 0 100,000 2,540,000 Net Change In Fund Balances (387,748) (9,613) (9,192) (406,553) Fund Balances (Deficit) at Beginning of Year 1,496,479 12,099 2,297,438 3,806,016 Fund Balances at End of Year $ 1,108,731 $ 2,486 $ 2,288,246 $ 3,399,463

City of Rocky River, Ohio Combining Balance Sheet Non-Major Special Revenue Funds December 31, 2010

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Indigent Law Community Driver Enforcement Enforcement Diversion Alcohol and Trust Program Treatment Education Assets: Equity in Pooled Cash and Cash Equivalents $ 98,772 $ 6,332 $ 137,683 $ 13,861 Accrued Interest Receivable 0 0 0 0 Accounts Receivable 3,073 0 2,667 120 Intergovernmental Receivable 8,387 0 0 0 Materials and Supplies Inventory 0 0 0 0 Taxes Receivable 0 0 0 0 Total Assets $ 110,232 $ 6,332 $ 140,350 $ 13,981 Liabilities and Fund Balances: Liabilities: Accounts Payable $ 2,240 $ 0 $ 18,358 $ 198 Accrued Wages and Benefits 0 0 0 0 Intergovernmental Payable 0 96 0 0 Deferred Revenue 0 0 0 0 Total Liabilities 2,240 96 18,358 198 Fund Balances: Reserve for Encumbrances 0 0 2,500 0 Reserve for Inventory 0 0 0 0 Unreserved, Undesignated (Deficit) 107,992 6,236 119,492 13,783 Total Fund Balances (Deficit) 107,992 6,236 121,992 13,783 Total Liabilities and Fund Balances $ 110,232 $ 6,332 $ 140,350 $ 13,981

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Federal Municipal Emergency Probation Mediation Management Office on Marine Services Services Agency Aging Patrol $ 393,032 $ 68,119 $ 1,357 $ 48,506 $ 3,866 54 0 0 0 0 15,173 1,260 0 0 0 0 0 0 22,504 0 0 0 0 46,937 0 0 0 0 302,845 0 $ 408,259 $ 69,379 $ 1,357 $ 420,792 $ 3,866 $ 16,318 $ 0 $ 910 $ 17,477 $ 34 807 174 0 3,798 0 3,887 489 0 22,645 789 0 0 0 325,349 0 21,012 663 910 369,269 823 1,060 0 0 8,967 0 0 0 0 46,937 0 386,187 68,716 447 (4,381) 3,043 387,247 68,716 447 51,523 3,043 $ 408,259 $ 69,379 $ 1,357 $ 420,792 $ 3,866 (continued)

City of Rocky River, Ohio Combining Balance Sheet Non-Major Special Revenue Funds (Continued) December 31, 2010

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Motor Vehicle Street Repair Community Refuse and License and Impacts Recycling Tax Maintenance Assets: Equity in Pooled Cash and Cash Equivalents $ 3,312 $ 80,881 $ 32,977 $ 271,777 Accrued Interest Receivable 0 0 0 0 Accounts Receivable 0 0 0 0 Intergovernmental Receivable 0 45,009 3,492 319,112 Materials and Supplies Inventory 0 3,858 0 101,778 Taxes Receivable 0 605,689 0 0 Total Assets $ 3,312 $ 735,437 $ 36,469 $ 692,667 Liabilities and Fund Balances: Liabilities: Accounts Payable $ 0 $ 45,233 $ 2,415 $ 28,865 Accrued Wages and Benefits 0 11,880 2,278 10,734 Intergovernmental Payable 0 34,496 8,127 23,609 Deferred Revenue 0 650,698 0 214,466 Total Liabilities 0 742,307 12,820 277,674 Fund Balances: Reserve for Encumbrances 0 28,435 7,664 109,710 Reserve for Inventory 0 3,858 0 101,778 Unreserved, Undesignated (Deficit) 3,312 (39,163) 15,985 203,505 Total Fund Balances (Deficit) 3,312 (6,870) 23,649 414,993 Total Liabilities and Fund Balances $ 3,312 $ 735,437 $ 36,469 $ 692,667

73

Total Indigent Driver Non-major State Alcohol Fire Police Special Revenue Highway Monitoring Levy Levy Funds $ 120,122 $ 70,949 $ 27,929 $ 33,078 $ 1,412,553 0 0 0 0 54 0 0 0 0 22,293 25,874 5,359 13,503 13,503 456,743 0 0 0 0 152,573 0 0 181,707 181,707 1,271,948 $ 145,996 $ 76,308 $ 223,139 $ 228,288 $ 3,316,164 $ 51,163 $ 5,490 $ 0 $ 0 $ 188,701 0 0 0 0 29,671 0 0 154,100 142,501 390,739 17,389 0 195,210 195,210 1,598,322 68,552 5,490 349,310 337,711 2,207,433 23,848 0 550 1,000 183,734 0 0 0 0 152,573 53,596 70,818 (126,721) (110,423) 772,424 77,444 70,818 (126,171) (109,423) 1,108,731 $ 145,996 $ 76,308 $ 223,139 $ 228,288 $ 3,316,164

City of Rocky River, Ohio Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Special Revenue Funds For the Year Ended December 31, 2010

74

Indigent Law Community Driver Enforcement Enforcement Diversion Alcohol and Trust Program Treatment Education Revenues: Property Taxes $ 0 $ 0 $ 0 $ 0 Intergovernmental 39,687 0 0 0 Charges for Services 0 0 0 0 Fees, Fines and Permits 4,253 6,375 62,693 2,757 Investment Income 0 0 0 0 Other 0 0 0 0 Total Revenues 43,940 6,375 62,693 2,757 Expenditures: Current: Security of Persons and Property 3,992 3,808 40,733 2,371 Public Health 0 0 0 0 Basic Utility Service 0 0 0 0 Transportation 0 0 0 0 General Government 0 0 0 0 Capital Outlay 45,238 0 0 0 Debt Service: Principal Retirement 0 0 0 0 Interest and Fiscal Charges 0 0 0 0 Total Expenditures 49,230 3,808 40,733 2,371 Excess of Revenues Over (Under) Expenditures (5,290) 2,567 21,960 386 Other Financing Sources (Uses): Transfers – In 0 0 0 0 Net Change in Fund Balances (5,290) 2,567 21,960 386 Fund Balances (Deficit) at Beginning of Year 113,282 3,669 100,032 13,397 Fund Balances (Deficit) at End of Year $ 107,992 $ 6,236 $ 121,992 $ 13,783

75

Federal Municipal Emergency Probation Mediation Management Office on Marine Services Services Agency Aging Patrol $ 0 $ 0 $ 0 $ 307,412 $ 0 0 0 1,300 43,431 26,864 0 0 0 473,957 0 189,159 15,350 0 0 0 413 0 0 0 0 0 0 0 932 0 189,572 15,350 1,300 825,732 26,864 218,694 0 910 0 57,356 0 0 0 1,298,805 0 0 0 0 0 0 0 0 0 0 0 4,694 18,847 0 0 0 0 0 0 0 3,965 0 0 0 0 0 0 0 0 0 0 223,388 18,847 910 1,298,805 61,321 (33,816) (3,497) 390 (473,073) (34,457) 0 0 0 400,000 30,000 (33,816) (3,497) 390 (73,073) (4,457) 421,063 72,213 57 124,596 7,500 $ 387,247 $ 68,716 $ 447 $ 51,523 $ 3,043 (continued)

City of Rocky River, Ohio Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Special Revenue Funds (Continued) For the Year Ended December 31, 2010

76

Motor Vehicle Street Repair Community Refuse and License and Impacts Recycling Tax Maintenance Revenues: Property Taxes $ 0 $ 614,825 $ 0 $ 0 Intergovernmental 0 86,861 39,826 680,201 Charges for Services 0 10,201 0 0 Fees, Fines and Permits 0 0 0 0 Investment Income 0 0 0 0 Other 0 4,679 0 0 Total Revenues 0 716,566 39,826 680,201 Expenditures: Current: Security of Persons and Property 0 0 10,407 0 Public Health 0 0 0 0 Basic Utility Service 0 1,555,516 0 0 Transportation 0 0 338,064 1,157,561 General Government 0 0 0 0 Capital Outlay 0 10 510 13,710 Debt Service: Principal Retirement 0 0 0 0 Interest and Fiscal Charges 0 0 0 0 Total Expenditures 0 1,555,526 348,981 1,171,271 Excess of Revenues Over (Under) Expenditures 0 (838,960) (309,155) (491,070) Other Financing Sources (Uses): Transfers – In 0 810,000 275,000 500,000 Net Change in Fund Balances 0 (28,960) (34,155) 8,930 Fund Balances (Deficit) at Beginning of Year 3,312 22,090 57,804 406,063 Fund Balances (Deficit) at End of Year $ 3,312 $ (6,870) $ 23,649 $ 414,993

77

Total Indigent Driver Non-major State Alcohol Fire Police Special Revenue Highway Monitoring Levy Levy Funds $ 0 $ 0 $ 184,448 $ 184,448 $ 1,291,133 55,512 45,122 26,058 26,058 1,070,920 0 0 0 0 484,158 0 0 0 0 280,587 0 0 0 0 413 0 0 0 0 5,611 55,512 45,122 210,506 210,506 3,132,822 0 0 546,983 515,515 1,400,769 0 0 0 0 1,298,805 0 0 0 0 1,555,516 56,942 0 0 0 1,552,567 0 0 0 0 23,541 0 12,767 0 0 76,200 0 0 7,667 20,413 28,080 0 0 12,472 12,620 25,092 56,942 12,767 567,122 548,548 5,960,570 (1,430) 32,355 (356,616) (338,042) (2,827,748) 0 0 200,000 225,000 2,440,000 (1,430) 32,355 (156,616) (113,042) (387,748) 78,874 38,463 30,445 3,619 1,496,479 $ 77,444 $ 70,818 $ (126,171) $ (109,423) $ 1,108,731

City of Rocky River, Ohio Combining Balance Sheet Non-Major Capital Projects Funds December 31, 2010

78

Municipal Total Court Non-major Equipment Capital Capital Project Replacement Improvement Funds Assets: Equity in Pooled Cash and Cash Equivalents $ 77,523 $ 2,174,752 $ 2,252,275 Accrued Interest Receivable 0 165 165 Accounts Receivable 0 54,003 54,003 Intergovernmental Receivable 4,060 0 4,060 Total Assets $ 81,583 $ 2,228,920 $ 2,310,503 Liabilities and Fund Balances: Liabilities: Accounts Payable $ 9,567 $ 4,978 $ 14,545 Accrued Wages and Benefits 0 434 434 Intergovernmental Payable 0 7,278 7,278 Total Liabilities 9,567 12,690 22,257 Fund Balances: Reserve for Encumbrances 1,897 101,568 103,465 Unreserved, Undesignated 70,119 2,114,662 2,184,781 Total Fund Balances 72,016 2,216,230 2,288,246 Total Liabilities and Fund Balances $ 81,583 $ 2,228,920 $ 2,310,503

City of Rocky River, Ohio Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Capital Project Funds For the Year Ended December 31, 2010

79

Municipal Total Court Non-major Equipment Capital Capital Project Replacement Improvement Funds Revenues: Intergovernmental $ 40,209 $ 783,282 $ 823,491 Fees, Fines, and Permits 0 54,003 54,003 Investment Income 0 3,815 3,815 Total Revenues 40,209 841,100 881,309 Expenditures: Capital Outlay 223,914 512,874 736,788 Debt Service: Principal Retirement 0 115,000 115,000 Interest and Fiscal Charges 0 138,713 138,713 Total Expenditures 223,914 766,587 990,501 Excess of Revenues Over (Under) Expenditures (183,705) 74,513 (109,192) Other Financing Sources (Uses): Transfers-In 100,000 0 100,000 Net Change in Fund Balances (83,705) 74,513 (9,192) Fund Balances at Beginning of Year 155,721 2,141,717 2,297,438 Fund Balances at End of Year $ 72,016 $ 2,216,230 $ 2,288,246

80

Individual Fund Schedules of Revenues, Expenditures/Expense and

Changes in Fund Balances/Equity - Budget (Non – GAAP Basis) and Actual

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual General Fund For The Year Ended December 31, 2010

81

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 4,249,724 $ 4,249,724 $ 3,873,395 $ (376,329) Municipal Income Taxes 7,614,542 8,000,000 7,973,505 (26,495) Other Local Taxes 38,073 40,000 33,855 (6,145) Intergovernmental 2,006,375 2,107,940 2,742,053 634,113 Charges for Services 33,980 35,700 22,177 (13,523) Rentals 71,387 75,000 82,874 7,874 Fines, Fees, and Permits 3,225,329 3,388,600 3,049,281 (339,319) Investment Income 171,327 180,000 33,631 (146,369) Miscellaneous Income 108,385 115,600 99,611 (15,989) Total Revenues 17,519,122 18,192,564 17,910,382 (282,182) Expenditures: Current: General Government: Council: Personal Service 125,726 125,726 122,320 3,406 Other 8,550 8,550 1,648 6,902 Total Council 134,276 134,276 123,968 10,308 Mayor: Personal Service 183,126 183,126 172,592 10,534 Other 8,755 8,755 4,296 4,459 Total Mayor 191,881 191,881 176,888 14,993 Finance Department: Personal Service 298,486 298,486 289,237 9,249 Other 104,367 118,367 111,252 7,115 Total Finance Department 402,853 416,853 400,489 16,364 Law Director: Personal Service 119,702 119,702 115,342 4,360 Other 94,348 94,348 85,004 9,344 Total Law Director 214,050 214,050 200,346 13,704 Other Executive Administration: Personal Service 196,019 196,019 191,578 4,441 Other 30,238 30,238 17,713 12,525 Total Other Executive Administration 226,257 226,257 209,291 16,966 (continued)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual General Fund (continued) For The Year Ended December 31, 2010

82

Variance With Final Budget Budget Positive Original Final Actual (Negative) Boards and Commissions: Personal Service 33,963 33,963 25,403 8,560 Other 43,900 43,900 33,750 10,150 Total Boards and Commissions 77,863 77,863 59,153 18,710 Building Maintenance: Personal Service 405,818 400,818 383,980 16,838 Other 399,039 425,039 409,244 15,795 Total Building Maintenance 804,857 825,857 793,224 32,633 Human Resources: Personal Service 101,024 101,024 97,247 3,777 Other 46,760 46,760 27,091 19,669 Total Human Resources 147,784 147,784 124,338 23,446 Municipal Courts: Personal Service 2,203,177 1,980,539 1,848,369 132,170 Other 299,243 299,243 181,431 117,812 Total Municipal Courts 2,502,420 2,279,782 2,029,800 249,982 Miscellaneous: Other 1,025,047 1,383,685 1,383,685 0 Total General Government 5,727,288 5,898,288 5,501,182 397,106 Security of Persons And Property: Police Department: Personal Service 3,911,942 3,911,942 3,729,037 182,905 Other 537,228 533,228 351,958 181,270 Total Police Department 4,449,170 4,445,170 4,080,995 364,175 Fire Department: Personal Service 3,087,483 3,087,483 2,929,177 158,306 Other 389,588 384,588 325,354 59,234 Total Fire Department 3,477,071 3,472,071 3,254,531 217,540 (continued)


83

Variance With Final Budget Budget Positive Original Final Actual (Negative) Police on Patrol Arresting Speeders: Personal Service 138,038 138,038 68,343 69,695 Other 151,528 163,528 133,526 30,002 Total Police on Patrol Arresting Speeders 289,566 301,566 201,869 99,697 Street Lighting: Other 297,000 347,000 344,698 2,302 Administrative Support: Personal Service 180,265 180,265 179,710 555 Total Security of Persons and Property 8,693,072 8,746,072 8,061,803 684,269 Transportation: Equipment Repair and Garage: Personal Service 654,719 654,719 572,818 81,901 Other 146,602 134,602 114,683 19,919 Total Transportation 801,321 789,321 687,501 101,820 Community Development: Community Center: Personal Service 571,141 571,141 534,789 36,352 Other 72,956 72,956 58,041 14,915 Total Community Center 644,097 644,097 592,830 51,267 Economic Development: Personal Service 150,966 150,966 142,305 8,661 Other 113,088 113,088 52,429 60,659 Total Economic Development 264,054 264,054 194,734 69,320 Total Community Development 908,151 908,151 787,564 120,587 Leisure Time Activities: Parks Department: Personal Service 353,280 346,280 309,698 36,582 Other 112,140 105,140 66,608 38,532 Total Leisure Time Activities 465,420 451,420 376,306 75,114 (continued)


84

Variance With Final Budget Budget Positive Original Final Actual (Negative) Capital Outlay 88,540 76,540 50,164 26,376 Total Expenditures 16,683,792 16,869,792 15,464,520 1,405,272 Excess of Revenues Over (Under) Expenditures 835,330 1,322,772 2,445,862 1,123,090 Other Financing Sources (Uses): Sale of Capital Assets 19,036 20,000 110 (19,890) Transfers – Out (5,052,000) (4,866,000) (4,471,000) 395,000 Total Other Financing Sources (Uses) (5,032,964) (4,846,000) (4,470,890) 375,110 Net Change in Fund Balance (4,197,634) (3,523,228) (2,025,028) 1,498,200 Fund Balance at Beginning of Year 3,566,327 3,566,327 3,566,327 0 Prior Year Encumbrances Appropriated 158,400 158,400 158,400 0 Fund Balance at End of Year $ (427,907) $ 201,499 $ 1,699,699 $ 1,498,200

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance − Budget (Non-GAAP Budgetary Basis) and Actual Recreation Center Fund For the Year Ended December 31, 2010

85

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 337,280 $ 337,280 $ 307,412 $ (29,868) Charges for Services 2,262,446 2,211,000 2,095,331 (115,669) Intergovernmental 0 0 43,431 43,431 Rentals 30,698 30,000 21,173 (8,827) Total Revenues 2,630,424 2,578,280 2,467,347 (110,933) Expenditures: Current: Leisure Time Activities: Recreation Center: Personal Service 2,205,095 2,255,095 2,200,680 54,415 Other 1,273,943 1,223,943 1,056,917 167,026 Capital Outlay 6,157 6,157 4,028 2,129 Total Expenditures 3,485,195 3,485,195 3,261,625 223,570 Excess of Revenues Over (Under) Expenditures (854,771) (906,915) (794,278) 112,637 Other Financing Sources (Uses): Transfers-In 613,961 600,000 600,000 0 Net Change in Fund Balances (240,810) (306,915) (194,278) 112,637 Fund Balance at Beginning of Year 342,605 342,605 342,605 0 Prior Year Encumbrances Appropriated 72,100 72,100 72,100 0 Fund Balance at End of Year $ 173,895 $ 107,790 $ 220,427 $ 112,637

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance − Budget (Non-GAAP Budgetary Basis) and Actual General Obligation Bond Retirement Fund For the Year Ended December 31, 2010

86

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 674,560 $ 674,560 $ 599,782 $ (74,778) Intergovernmental 0 0 86,862 86,862 Total Revenues 674,560 674,560 686,644 12,084 Expenditures: Debt Service: Principal Retirement 955,000 955,000 955,000 0 Interest and Fiscal Charges 620,100 620,100 620,068 32 Total Expenditures 1,575,100 1,575,100 1,575,068 32 Excess of Revenues Over (Under) Expenditures (900,540) (900,540) (888,424) 12,116 Other Financing Sources (Uses): Transfers – In 731,000 731,000 731,000 0 Net Change in Fund Balances (169,540) (169,540) (157,424) 12,116 Fund Balance at Beginning of Year 284,649 284,649 284,649 0 Fund Balance at End of Year $ 115,109 $ 115,109 $ 127,225 $ 12,116

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance − Budget (Non-GAAP Budgetary Basis) and Actual Sewer Rehabilitation Fund For the Year Ended December 31, 2010

87

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for Services $ 149,687 $ 810,000 $ 1,030,670 $ 220,670 Intergovernmental 555,179 4,060,543 463,209 (3,597,334) Total Revenue 704,866 4,870,543 1,493,879 (3,376,664) Expenditures: Current: Basic Utility Services: Sewer Rehabilitation: Other 6,830,595 6,830,595 5,458,815 1,371,780 Excess of Revenues Over (Under) Expenditures (6,125,729) (1,960,052) (3,964,936) (2,004,884) Other Financing Sources (Uses): Proceeds from Debt Issuance 239,457 239,457 239,457 0 Net Change in Fund Balance (5,886,272) (1,720,595) (3,725,479) (2,004,884) Fund Balance at Beginning of Year 1,277,066 1,277,066 1,277,066 0 Prior Year Encumbrances Appropriated 1,231,259 1,231,259 1,231,259 0 Fund Balance at End of Year $ (3,377,947) $ 787,730 $ (1,217,154) $ (2,004,884)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Capital Improvement Fund For The Year Ended December 31, 2010

88

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 674,560 $ 674,560 $ 614,825 $ (59,735) Fees, Fines, And Permits 126 700 550 (150) Charges For Services 361 2,000 1,450 (550) Intergovernmental 18,041 100,000 86,861 (13,139) Special Assessment 361 2,000 0 (2,000) Investment Income 1,046 5,800 1,815 (3,985) Other Local Taxes 29,767 165,000 184,718 19,718 Other 433,954 2,405,400 2,150 (2,403,250) Total Revenues 1,158,216 3,355,460 892,369 (2,463,091) Expenditures: Capital Outlay 5,443,020 5,443,020 2,741,937 2,701,083 Excess of Revenues Over (Under) Expenditures (4,284,804) (2,087,560) (1,849,568) 237,992 Other Financing Sources (Uses): Transfers - In 108,245 600,000 600,000 0 Net Change in Fund Balance (4,176,559) (1,487,560) (1,249,568) 237,992 Fund Balance at Beginning of Year 201,442 201,442 201,442 0 Prior Year Encumbrances Appropriated 1,552,520 1,552,520 1,552,520 0 Fund Balance at End of Year $ (2,422,597) $ 266,402 $ 504,394 $ 237,992

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Law Enforcement Trust Fund For The Year Ended December 31, 2010

89

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fines, Fees, and Permits $ 27,322 $ 15,000 $ 1,457 $ (13,543) Intergovernmental 27,322 15,000 31,300 16,300 Total Revenues 54,644 30,000 32,757 2,757 Expenditures: Current: Security of Persons and Property: Law Enforcement Trust: Personal Service 15,000 15,000 0 15,000 Other 36,569 36,569 2,164 34,405 Capital Outlay 50,000 50,000 45,238 4,762 Total Expenditures 101,569 101,569 47,402 54,167 Net Change in Fund Balance (46,925) (71,569) (14,645) 56,924 Fund Balance at Beginning of Year 112,548 112,548 112,548 0 Prior Year Encumbrances Appropriated 869 869 869 0 Fund Balance at End of Year $ 66,492 $ 41,848 $ 98,772 $ 56,924

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Community Diversion Program Fund For The Year Ended December 31, 2010

90

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fines, Fees and Permits $ 3,400 $ 5,100 $ 6,375 $ 1,275 Expenditures: Current: Security of Persons and Property: Commercial Driver Program: Personal Service 5,900 9,100 4,238 4,862 Net Change in Fund Balance (2,500) (4,000) 2,137 6,137 Fund Balance at Beginning of Year 4,195 4,195 4,195 0 Fund Balance at End of Year $ 1,695 $ 195 $ 6,332 $ 6,137

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Indigent Driver Alcohol Treatment Fund For The Year Ended December 31, 2010

91

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fines, Fees, and Permits $ 40,000 $ 41,000 $ 62,989 $ 21,989 Expenditures: Current: Security of Persons and Property: Indigent Driver Alcohol Treatment: Other 67,460 67,460 30,906 36,554 Net Change in Fund Balance (27,460) (26,460) 32,083 58,543 Fund Balance at Beginning of Year 97,469 97,469 97,469 0 Prior Year Encumbrances Appropriated 2,460 2,460 2,460 0 Fund Balance at End of Year $ 72,469 $ 73,469 $ 132,012 $ 58,543

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Enforcement and Education Fund For The Year Ended December 31, 2010

92

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fines, Fees, and Permits $ 3,600 $ 3,600 $ 2,713 $ (887) Expenditures: Current: Security of Persons and Property: Enforcement and Education: Other 10,200 10,200 2,173 8,027 Net Change in Fund Balance (6,600) (6,600) 540 7,140 Fund Balance at Beginning of Year 13,321 13,321 13,321 0 Fund Balance at End of Year $ 6,721 $ 6,721 $ 13,861 $ 7,140

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Municipal Probation Services Fund For The Year Ended December 31, 2010

93

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fees, Fines, and Permits $ 119,372 $ 190,000 $ 187,936 $ (2,064) Investment Income 628 1,000 681 (319) Total Revenues 120,000 191,000 188,617 (2,383) Expenditures: Current: Security of Persons and Property: Municipal Probation Services: Personal Service 152,500 156,778 156,778 0 Capital Outlay 8,000 9,000 5,765 3,235 Other 103,041 97,763 63,068 34,695 Total Expenditures 263,541 263,541 225,611 37,930 Net Change in Fund Balance (143,541) (72,541) (36,994) 35,547 Fund Balance at Beginning of Year 420,835 420,835 420,835 0 Prior Year Encumbrances Appropriated 4,541 4,541 4,541 0 Fund Balance at End of Year $ 281,835 $ 352,835 $ 388,382 $ 35,547

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Mediation Services Fund For The Year Ended December 31, 2010

94

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Fines, Fees, and Permits $ 18,000 $ 20,000 $ 15,205 $ (4,795) Expenditures: Current: General Government: Mediation Services: Other 46,300 46,300 19,373 26,927 Net Change in Fund Balance (28,300) (26,300) (4,168) 22,132 Fund Balance at Beginning of Year 72,287 72,287 72,287 0 Fund Balance at End of Year $ 43,987 $ 45,987 $ 68,119 $ 22,132

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Federal Emergency Management Agency Grant Fund For The Year Ended December 31, 2010

95

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 0 $ 0 $ 1,300 $ 1,300 Net Change in Fund Balance 0 0 1,300 1,300 Fund Balance at Beginning of Year 57 57 57 0 Fund Balance at End of Year $ 57 $ 57 $ 1,357 $ 1,300

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Office on Aging Fund For The Year Ended December 31, 2010

96

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 337,280 $ 337,280 $ 307,412 $ (29,868) Intergovernmental 0 0 43,431 43,431 Charges for Services 436,107 432,000 473,957 41,957 Other 1,010 1,000 932 (68) Total Revenues 774,397 770,280 825,732 55,452 Expenditures: Current: Public Health Services: Office on Aging: Personal Service 792,426 792,426 802,076 (9,650) Other 565,420 565,420 503,312 62,108 Total Expenditures 1,357,846 1,357,846 1,305,388 52,458 Excess of Revenues Over (Under) Expenditures (583,449) (587,566) (479,656) 107,910 Other Financing Sources (Uses): Transfers – In 504,754 500,000 400,000 (100,000) Net Change in Fund Balance (78,695) (87,566) (79,656) 7,910 Fund Balance at Beginning of Year 99,636 99,636 99,636 0 Prior Year Encumbrances Appropriated 13,570 13,570 13,570 0 Fund Balance at End of Year $ 34,511 $ 25,640 $ 33,550 $ 7,910

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Marine Patrol Fund For The Year Ended December 31, 2010

97

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 16,398 $ 24,000 $ 26,864 $ 2,864 Expenditures: Current: Security of Persons and Property: Marine Patrol: Personal Service 57,000 57,000 47,927 9,073 Other 18,450 17,450 9,557 7,893 Total Marine Patrol 75,450 74,450 57,484 16,966 Capital Outlay 3,000 4,000 3,965 35 Total Expenditures 78,450 78,450 61,449 17,001 Excess of Revenues Over (Under) Expenditures (62,052) (54,450) (34,585) 19,865 Other Financing Sources (Uses): Transfers – In 34,164 50,000 30,000 (20,000) Net Change in Fund Balance (27,888) (4,450) (4,585) (135) Fund Balance at Beginning of Year 8,451 8,451 8,451 0 Fund Balance at End of Year $ (19,437) $ 4,001 $ 3,866 $ (135)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Community Impacts Fund For The Year Ended December 31, 2010

98

Variance With Final Budget Budget Positive Original Final Actual (Negative) Expenditures: Current: General Government: Community Impacts: Other $ 3,312 $ 3,312 $ 0 $ 3,312 Net Change in Fund Balance (3,312) (3,312) 0 3,312 Fund Balance at Beginning of Year 3,312 3,312 3,312 0 Fund Balance at End of Year $ 0 $ 0 $ 3,312 $ 3,312

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Refuse and Recycling Fund For The Year Ended December 31, 2010

99

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 674,560 $ 674,560 $ 614,825 $ (59,735) Charges for Services 16,171 18,000 10,201 (7,799) Intergovernmental 0 0 86,861 86,861 Other 5,390 6,000 4,679 (1,321) Total Revenues 696,121 698,560 716,566 18,006 Expenditures: Current: Basic Utilities Service: Refuse and Recycling: Personal Service 1,102,254 1,110,254 1,066,744 43,510 Other 734,027 726,027 648,161 77,866 Total Refuse and Recycling 1,836,281 1,836,281 1,714,905 121,376 Capital Outlay 1,000 1,000 10 990 Total Expenditures 1,837,281 1,837,281 1,714,915 122,366 Excess of Revenues Over (Under) Expenditures (1,141,160) (1,138,721) (998,349) 140,372 Other Financing Sources (Uses): Transfers – In 862,439 960,000 810,000 (150,000) Net Change in Fund Balance (278,721) (178,721) (188,349) (9,628) Fund Balance at Beginning of Year 130,692 130,692 130,692 0 Prior Year Encumbrances Appropriated 75,427 75,427 75,427 0 Fund Balance at End of Year $ (72,602) $ 27,398 $ 17,770 $ (9,628)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Motor Vehicle License Tax Fund For The Year Ended December 31, 2010

100

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 35,300 $ 38,000 $ 39,707 $ 1,707 Expenditures: Current: Transportation: Motor Vehicle License Tax: Personal Service 315,358 315,358 305,390 9,968 Other 90,306 90,306 64,860 25,446 Total Motor Vehicle License Tax 405,664 405,664 370,250 35,414 Capital Outlay 1,000 1,000 510 490 Total Expenditures 406,664 406,664 370,760 35,904 Excess of Revenues Over (Under) Expenditures (371,364) (368,664) (331,053) 37,611 Other Financing Sources (Uses): Transfers – In 278,686 300,000 275,000 (25,000) Net Change in Fund Balance (92,678) (68,664) (56,053) 12,611 Fund Balance at Beginning of Year 79,044 79,044 79,044 0 Prior Year Encumbrances Appropriated 2,156 2,156 2,156 0 Fund Balance at End of Year $ (11,478) $ 12,536 $ 25,147 $ 12,611

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Street Repair and Maintenance Fund For The Year Ended December 31, 2010

101

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 595,385 $ 600,000 $ 686,964 $ 86,964 Expenditures: Current: Transportation Street Repair and Maintenance: Personal Service 999,100 999,100 872,460 126,640 Other 564,355 564,355 493,660 70,695 Total Street Repair and Maintenance 1,563,455 1,563,455 1,366,120 197,335 Capital Outlay 35,367 35,367 13,834 21,533 Total Expenditures 1,598,822 1,598,822 1,379,954 218,868 Excess of Revenues Over (Under) Expenditures (1,003,437) (998,822) (692,990) 305,832 Other Financing Sources (Uses): Transfers – In 694,615 700,000 500,000 (200,000) Net Change in Fund Balance (308,822) (298,822) (192,990) 105,832 Fund Balance at Beginning of Year 216,095 216,095 216,095 0 Prior Year Encumbrances Appropriated 118,922 118,922 118,922 0 Fund Balance at End of Year $ 26,195 $ 36,195 $ 142,027 $ 105,832

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual State Highway Fund For The Year Ended December 31, 2010

102

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 47,600 $ 49,900 $ 56,060 $ 6,160 Expenditures: Current: Transportation: State Highway Patrol: Other 127,800 127,800 108,288 19,512 Net Change in Fund Balance (80,200) (77,900) (52,228) 25,672 Fund Balance at Beginning of Year 49,539 49,539 49,539 0 Prior Year Encumbrances Appropriated 47,800 47,800 47,800 0 Fund Balance at End of Year $ 17,139 $ 19,439 $ 45,111 $ 25,672

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Indigent Driver Alcohol Monitoring Fund For The Year Ended December 31, 2010

103

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 0 $ 30,000 $ 42,762 $ 12,762 Expenditures: Current: Capital Outlay 20,364 20,364 8,013 12,351 Net Change in Fund Balance (20,364) 9,636 34,749 25,113 Fund Balance at Beginning of Year 35,836 35,836 35,836 0 Prior Year Encumbrances Appropriated 364 364 364 0 Fund Balance at End of Year $ 15,836 $ 45,836 $ 70,949 $ 25,113

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Fire Levy Fund For The Year Ended December 31, 2010

104

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 202,368 $ 202,368 $ 184,448 $ (17,920) Intergovernmental 0 0 26,058 26,058 Total Revenues 202,368 202,368 210,506 8,138 Expenditures: Current: Security of Persons and Property: Fire: Personal Service 620,100 620,100 553,529 66,571 Other 20,139 20,139 20,139 0 Total Expenditures 640,239 640,239 573,668 66,571 Excess of Revenues Over (Under) Expenditures (437,871) (437,871) (363,162) 74,709 Other Financing Sources (Uses): Transfers – In 423,039 250,000 200,000 (50,000) Net Change in Fund Balance (14,832) (187,871) (163,162) 24,709 Fund Balance at Beginning of Year 190,541 190,541 190,541 0 Fund Balance at End of Year $ 175,709 $ 2,670 $ 27,379 $ 24,709

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Police Levy Fund For The Year Ended December 31, 2010

105

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Property Taxes $ 202,368 $ 202,368 $ 184,448 $ (17,920) Intergovernmental 0 0 26,058 26,058 Total Revenues 202,368 202,368 210,506 8,138 Expenditures: Current: Security of Persons and Property: Police: Personal Service 568,400 568,400 521,933 46,467 Other 33,034 33,034 33,033 1 Total Expenditures 601,434 601,434 554,966 46,468 Excess of Revenues Over (Under) Expenditures (399,066) (399,066) (344,460) 54,606 Other Financing Sources (Uses): Transfers – In 280,568 250,000 225,000 (25,000) Net Change in Fund Balance (118,498) (149,066) (119,460) 29,606 Fund Balance at Beginning of Year 151,538 151,538 151,538 0 Fund Balance at End of Year $ 30,040 $ 2,472 $ 32,078 $ 29,606

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Special Assessment Bond Retirement Fund For The Year Ended December 31, 2010

106

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Special Assessments $ 53,719 $ 50,000 $ 61,788 $ 11,788 Expenditures: Debt Service: Principal Retirement 40,000 40,000 40,000 0 Interest and Fiscal Charges 31,238 31,238 31,049 189 Total Expenditures 71,238 71,238 71,049 189 Excess of Revenues Over (Under) Expenditures (17,519) (21,238) (9,261) 11,977 Other Financing Sources (Uses): Transfers – In 21,487 20,000 0 (20,000) Net Change in Fund Balance 3,968 (1,238) (9,261) (8,023) Fund balance at Beginning of Year 12,099 12,099 12,099 0 Fund balance at End of Year $ 16,067 $ 10,861 $ 2,838 $ (8,023)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Equipment Replacement Fund For The Year Ended December 31, 2010

107

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 45,494 $ 32,000 $ 36,149 $ 4,149 Expenditures: Capital Outlay 362,131 362,131 229,689 132,442 Excess of Revenues Over (Under) Expenditures (316,637) (330,131) (193,540) 136,591 Other Financing Sources (Uses): Transfers – In 426,506 300,000 100,000 (200,000) Net Change in Fund Balance 109,869 (30,131) (93,540) (63,409) Fund Balance at Beginning of Year 126,168 126,168 126,168 0 Prior Year Encumbrances Appropriated 33,431 33,431 33,431 0 Fund Balance at End of Year $ 269,468 $ 129,468 $ 66,059 $ (63,409)

City of Rocky River, Ohio Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Budgetary Basis) and Actual Municipal Court Capital Improvement Fund For The Year Ended December 31, 2010

108

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 512,900 $ 820,900 $ 838,871 $ 17,971 Investment Income 35,903 29,500 4,080 (25,420) Total Revenues 548,803 850,400 842,951 (7,449) Expenditures: Current: General Government: Personal Service 387,011 387,011 279,395 107,616 Other 233,237 230,237 164,134 66,103 Capital Outlay 243,867 246,867 209,438 37,429 Debt Service: Principal Retirement 115,000 115,000 115,000 0 Interest and Fiscal Charges 138,800 138,800 138,713 87 Total Expenditures 1,117,915 1,117,915 906,680 211,235 Net Change in Fund Balance (569,112) (267,515) (63,729) 203,786 Fund Balance at Beginning of Year 2,124,839 2,124,839 2,124,839 0 Prior Year Encumbrances Appropriated 9,804 9,804 9,804 0 Fund Balance at End of Year $ 1,565,531 $ 1,867,128 $ 2,070,914 $ 203,786

City of Rocky River, Ohio Schedule of Revenues, Expenses and Changes in Fund Equity – Budget (Non-GAAP Budgetary Basis) and Actual Sanitary Sewer Fund For The Year Ended December 31, 2010

109

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charges for Services $ 1,912,500 $ 1,950,000 $ 1,739,031 $ (210,969) Expenses: Sewer Operations: Personal Service 635,154 635,154 613,119 22,035 Contractual Services 1,114,061 1,156,061 1,128,822 27,239 Heat, Light, And Power 20,000 19,000 15,748 3,252 Materials And Supplies 100,074 69,074 60,011 9,063 Other 5,327 5,327 4,192 1,135 Capital Outlay 20,000 10,000 7,708 2,292 Debt Service: Principal Retirement 16,560 16,560 16,550 10 Interest and Fiscal Charges 10,550 10,550 10,547 3 Total Expenses 1,921,726 1,921,726 1,856,697 65,029 Net Change in Fund Equity (9,226) 28,274 (117,666) (145,940) Fund Equity at Beginning of Year 231,473 231,473 231,473 0 Prior Year Encumbrances Appropriated 30,312 30,312 30,312 0 Fund Equity at End of Year $ 252,559 $ 290,059 $ 161,038 $ (145,940)

City of Rocky River, Ohio Schedule of Revenues, Expenses and Changes in Fund Equity – Budget (Non-GAAP Budgetary Basis) and Actual Self Insurance Fund For The Year Ended December 31, 2010

110

Variance With Final Budget Budget Positive Original Final Actual (Negative) Revenues: Charge for Services $ 2,177,603 $ 2,665,236 $ 2,005,733 $ (659,503) Expenses: Claims 2,531,636 2,531,636 1,767,086 764,550 Contractual Services 359,400 359,400 304,979 54,421 Total Expenses 2,891,036 2,891,036 2,072,065 818,971 Net Change in Fund Equity (713,433) (225,800) (66,332) 159,468 Fund Equity at Beginning of Year 542,145 542,145 542,145 0 Fund Equity at End of Year $ (171,288) $ 316,345 $ 475,813 $ 159,468

City of Rocky River, Ohio Fiduciary Funds Fund Descriptions

111

Agency Funds Deposits, Fees and Tri-City Fund – To account for refundable deposits and the Tri-City Council of Governments. Donations and Bequests Fund – To account for donations and bequests for various City departments. Municipal Court Fund – To account for the monies received and disbursed from the Rocky River Municipal Court. S.A.F.E. Fund – To account for financial transactions of the S.A.F.E. Council of Governments.

City of Rocky River, Ohio Combining Statement of Assets and Liabilities – Agency Funds December 31, 2010

112

Deposits, Fees and Donations Municipal Tri-City and Bequests Court S.A.F.E. Total Assets: Equity in Pooled Cash and Cash Equivalents $ 69,214 $ 263,415 $ 0 $ 6,890 $ 339,519 Cash and Cash Equivalents in Segregated Accounts 0 0 545,794 0 545,794 Total Assets $ 69,214 $ 263,415 $ 545,794 $ 6,890 $ 885,313 Liabilities: Undistributed Monies $ 0 $ 263,415 $ 0 $ 6,890 $ 270,305 Deposits Held and Due To Others 69,214 0 545,794 0 615,008 Total Liabilities $ 69,214 $ 263,415 $ 545,794 $ 6,890 $ 885,313

City of Rocky River, Ohio Combining Statement of Changes in Assets and Liabilities – Agency Funds For The Year Ended December 31, 2010

113

Balance Balance 12/31/09 Additions Deductions 12/31/10 Deposits, Fees and Tri-City Assets: Equity in Pooled Cash and Cash Equivalents $ 66,498 $ 11,455 $ 8,739 $ 69,214 Liabilities: Deposits Held and Due to Others $ 66,498 $ 11,455 $ 8,739 $ 69,214 Donations and Bequests Assets: Equity in Pooled Cash and Cash Equivalents $ 285,484 $ 19,713 $ 41,782 $ 263,415 Accounts Receivable 5,000 0 5,000 0 Total Assets $ 290,484 $ 19,713 $ 46,782 $ 263,415 Liabilities: Undistributed Monies $ 290,484 $ 19,713 $ 46,782 $ 263,415 Municipal Court Assets: Cash and Cash Equivalents in Segregated Accounts $ 555,777 $ 6,968,137 $ 6,978,120 $ 545,794 Liabilities: Deposits Held and Due to Others $ 555,777 $ 6,968,137 $ 6,978,120 $ 545,794 S.A.F.E. Assets: Equity in Pooled Cash and Cash Equivalents $ 15,287 $ 2,451 $ 10,848 $ 6,890 Liabilities: Undistributed Monies $ 15,287 $ 2,451 $ 10,848 $ 6,890 All Agency Funds Assets: Equity in Pooled Cash and Cash Equivalents $ 367,269 $ 33,619 $ 61,369 $ 339,519 Cash and Cash Equivalents in Segregated Accounts 555,777 6,968,137 6,978,120 545,794 Accounts Receivable 5,000 0 5,000 0 Total Assets $ 928,046 $ 7,001,756 $ 7,044,489 $ 885,313 Liabilities: Undistributed Monies $ 305,771 $ 22,164 $ 57,630 $ 270,305 Deposits Held and Due to Others 622,275 6,979,592 6,986,859 615,008 Total Liabilities $ 928,046 $ 7,001,756 $ 7,044,489 $ 885,313

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City of Rocky River, Ohio December 31, 2010

115

This part of the CAFR presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page(s) Financial Trends

These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

116 –123

Revenue Capacity

These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.

124 – 130

Debt Capacity

These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.

131 – 136 Economic and Demographic Information

These schedules offer economic and demographic indicators to help the reader understand the environment within which the City's financial activities take place.

137 – 139 Operating Information

These schedules contain service data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

140 – 145 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year.

City of Rocky River, Ohio Net Assets by Component – Last Eight Fiscal Years Accrual Basis of Accounting

116

2003 2004 2005 2006 2007 2008 2009 2010 Governmental Activities: Invested in Capital Assets, Net of Related Debt $ 25,694,191 $ 21,762,917 $ 24,062,462 $ 24,996,254 $ 28,079,248 $ 30,592,575 $ 31,254,205 $ 31,781,713 Restricted for: Capital Projects 6,697,396 8,506,497 10,244,546 8,538,517 4,038,732 4,463,366 6,208,401 6,304,738 Debt Services 933,368 436,075 311,203 370,924 299,208 434,148 295,558 129,556 Recreation 272,344 537,147 453,232 825,367 0 0 0 0 Municipal Probation 314,982 341,646 366,541 380,220 381,081 416,388 421,063 387,247 Aging 226,474 403,278 279,679 800,380 354,143 218,952 124,001 51,446 Street Construction and Maintenance 347,929 658,753 311,953 505,658 696,805 415,917 406,063 414,993 Other Purposes 212,492 712,932 421,903 848,768 364,080 816,857 539,121 224,268 Unreserved 2,078,511 4,238,433 3,759,748 3,047,689 8,033,664 5,210,492 3,227,747 2,162,461 Total Net Assets – Governmental Activities 36,777,687 37,597,678 40,211,267 40,313,777 42,246,961 42,568,695 42,476,159 41,456,422 Business-Type Activities: Invested in Capital Assets, Net of Related Debt 14,798,306 16,580,359 16,408,395 16,369,129 17,261,301 17,184,178 17,800,190 18,945,660 Unrestricted 6,970,391 7,028,630 6,975,394 7,038,020 6,690,857 6,668,185 6,619,718 6,177,103 Total Net Assets – Business-Type Activities 21,768,697 23,608,989 23,383,789 23,407,149 23,952,158 23,852,363 24,419,908 25,122,763 Primary Government: Invested in Capital, Net of Related Debt 40,492,497 38,343,276 40,470,857 41,365,383 45,340,549 47,776,753 49,054,395 50,727,373 Restricted for: Capital Projects 6,697,396 8,506,497 10,244,546 8,538,517 4,038,732 4,463,366 6,208,401 6,304,738 Debt Services 933,368 436,075 311,203 370,924 299,208 434,148 295,558 129,556 Recreation 272,344 537,147 453,232 825,367 0 0 0 0 Municipal Probation 314,982 341,646 366,541 380,220 381,081 416,388 421,063 387,247 Aging 226,474 403,278 279,679 800,380 354,143 218,952 124,001 51,446 Street Construction and Maintenance 347,929 658,753 311,953 505,658 696,805 415,917 406,063 414,993 Other Purposes 212,492 712,932 421,903 848,768 364,080 816,857 539,121 224,268 Unrestricted 9,048,902 11,267,063 10,735,142 10,085,709 14,724,521 11,878,677 9,847,465 8,339,564 Total Primary Government Net Assets $ 58,546,384 $ 61,206,667 $ 63,595,056 $ 63,720,926 $ 66,199,119 $ 66,421,058 $ 66,896,067 $ 66,579,185

City of Rocky River, Ohio Changes in Net Assets – Last Eight Fiscal Years Accrual Basis of Accounting

117

2003 2004 2005 2006 2007 2008 2009 2010 Program revenues: Governmental Activities: Charges for Services: General Government $ 2,406,821 $ 2,368,876 $ 2,834,113 $ 2,931,941 $ 2,130,339 $ 2,293,658 $ 2,761,052 $ 2,533,392 Security of Persons and Property 346,364 607,429 282,092 710,930 804,196 1,175,625 740,665 1,105,984 Public Health and Welfare 397,420 347,554 441,693 436,247 489,380 467,691 369,997 495,138 Transportation 19,603 14,256 425 500 75 425 75 350 Leisure Time Activities 1,265,249 1,234,683 1,401,233 1,451,092 1,907,655 1,987,167 1,979,316 2,118,323 Community Development 715 705 525 495 270 180 260 175 Basic Utility Service 14,966 19,370 16,982 17,965 11,847 700,345 995,455 1,040,871 Operating Grants and Contributions: General Government 0 0 0 0 0 63,921 35,857 45,122 Security of Persons and Property 40,392 25,604 25,584 25,946 24,107 27,352 25,263 26,864 Transportation 518,181 657,577 705,137 749,323 737,192 777,503 781,961 775,539 Basic Utility Service 70,301 121,500 78,317 65,250 41,254 90,523 90,956 86,861 Capital Grants and Contributions: General Government 749,605 789,079 819,794 619,653 873,945 929,746 824,696 823,491 Public Health 0 0 3,628 3,700 255 0 0 0 Transportation 0 0 0 0 64,000 0 0 0 Basic Utility Service 0 0 0 0 0 0 220,091 463,209 Total Governmental Activities Program Revenues 5,829,617 6,186,633 6,609,523 7,013,042 7,084,515 8,514,136 8,825,644 9,515,319 Business-Type Activities: Charges for Services: Sewer 1,649,436 2,012,219 1,853,327 1,882,034 1,862,049 2,012,434 1,979,436 1,758,085 Capital Grants and Contributions: Sewer 0 1,107,813 347,671 219,730 54,603 195,846 903,127 1,501,035 Total Business-Type Activities Program Revenues 1,649,436 3,120,032 2,200,998 2,101,764 1,916,652 2,208,280 2,882,563 3,259,120 Total Primary Government Program Revenues 7,479,053 9,306,665 8,810,521 9,114,806 9,001,167 10,722,416 11,708,207 12,774,439 (continued)

City of Rocky River, Ohio Changes in Net Assets – Last Eight Fiscal Years (continued) Accrual Basis of Accounting

118 (continued)

Expenses: 2003 2004 2005 2006 2007 2008 2009 2010 Governmental activities: General Government 5,142,027 4,555,899 4,514,387 8,818,319 6,808,557 8,051,702 6,932,356 7,598,480 Security of Persons and Property 8,037,215 7,673,916 7,876,398 9,202,339 9,829,332 9,396,241 9,623,866 9,010,010 Public Health and Welfare 1,071,428 977,448 1,142,913 1,220,577 1,363,640 1,347,437 1,437,857 1,428,688 Leisure Time Activities 2,619,434 3,933,467 4,973,173 783,730 4,076,680 3,937,438 4,268,822 3,948,809 Community Development 823,487 803,006 703,873 257,600 790,060 801,140 720,892 816,485 Basic Utility Services 2,161,930 1,739,378 1,900,149 1,934,737 1,693,864 1,609,178 1,772,114 2,127,597 Transportation 2,738,117 4,698,400 1,587,610 3,244,883 2,314,773 3,195,503 2,758,278 2,385,058 Interest and Fiscal Charges 439,230 507,297 965,098 925,760 882,306 854,095 824,261 790,980 Total Governmental Activities Expenses 23,032,868 24,888,811 23,663,601 26,387,945 27,759,212 29,192,734 28,338,446 28,106,107 Business-Type Activities: Sewer 2,405,376 1,279,740 2,426,198 2,078,404 2,454,298 2,308,075 2,315,018 2,450,068 Transfers 0 0 0 0 0 0 0 106,197 Total Business-Type Activities 2,405,376 1,279,740 2,426,198 2,078,404 2454,298 2,308,075 2,315,018 2,556,265 Total Primary Government Program Expenses 25,438,244 26,168,551 26,089,799 28,466,349 30,213,510 31,500,809 30,653,464 30,662,372 General Revenues: Property taxes and Other Local Taxes Levied for: General Purposes 3,344,189 3,669,410 3,595,174 3,695,587 4,210,179 4,018,607 4,093,251 3,872,423 Recreation 265,406 286,213 285,331 293,301 293,591 318,938 324,861 307,335 Office on Aging 265,406 286,213 286,175 283,755 331,210 318,938 324,861 307,335 Refuse and Recycling 530,815 572,426 569,818 596,199 624,749 637,881 649,723 614,670 Fire Levy 159,244 172,015 171,200 175,980 187,441 191,365 194,916 184,401 Police Levy 159,244 171,439 171,199 96,012 267,410 191,365 194,916 184,401 Capital Improvements 530,815 572,426 604,444 552,819 624,801 637,881 649,723 614,670 General Obligation Bond Retirement 0 0 570,663 666,569 542,651 626,790 634,889 599,627 Municipal Taxes Levied for: General Purposes 7,450,963 8,159,833 7,794,391 8,203,978 8,893,894 8,673,869 7,661,534 7,959,539 Franchise Tax 1,485,683 278,970 47,289 139,215 149,384 207,506 128,163 236,114 Admissions Tax 0 0 75,069 45,929 40,874 36,715 34,981 33,855 Grants and Entitlements not Restricted to Specific Programs 1,455,607 4,955,054 4,688,251 3,453,555 3,837,407 4,156,898 4,195,197 2,477,912 Investment Earnings 195,673 281,820 680,947 1,202,568 1,110,881 516,771 140,058 31,050 Other 327,212 116,350 127,716 71,946 407,662 466,811 193,193 41,522 Transfers 0 0 0 0 0 0 0 106,197 Total General Revenues and Transfers 16,170,257 19,522,169 19,667,667 19,477,413 21,522,134 21,000,332 19,420,266 17,571,051

City of Rocky River, Ohio Changes in Net Assets – Last Eight Fiscal Years (continued) Accrual Basis of Accounting

119

2003 2004 2005 2006 2007 2008 20009 2010 Change in Net Assets: Governmental Activities (1,032,994) 819,991 2,613,589 102,510 847,702 321,734 (92,536) (1,019,737) Business-Type Activities (755,940) 1,840,292 (225,200) 23,360 (537,646) (99,795) 567,545 702,855 Total Primary Government Change in Net Assets $ (1,788,934) $ 2,660,283 $ 2,388,389 $ 125,870 $ 310,056 $ 221,939 $ 475,009 $ (316,882)

City of Rocky River, Ohio Fund Balances, Governmental Funds – Last Ten Fiscal Years Modified Accrual Basis of Accounting

120

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

General Fund Reserved $ 174,205 $ 215,449 $ 172,542 $ 118,309 $ 158,475 $ 126,594 $ 124,594 $ 235,188 $ 118,863 $ 370,707 Unreserved 5,484,515 4,062,024 3,353,437 4,961,316 12,092,669 8,751,298 9,040,991 6,278,579 4,363,415 3,183,940 Total General Fund 5,658,720 4,277,473 3,525,979 5,079,625 12,251,144 8,877,892 9,165,386 6,513,767 4,482,278 3,554,647 All Other Governmental Funds Reserved 5,158,958 1,485,769 2,061,840 1,958,494 981,092 7,003,846 1,545,110 740,155 2,615,314 4,893,122 Unreserved, Undesignated, Reported in: Special Revenue Funds 1,610,920 2,280,066 1,662,708 2,274,096 1,620,122 3,179,196 1,498,981 1,494,900 722,896 375,705 Debt Service Funds 127,700 126,242 129,136 436,075 309,515 368,623 320,601 434,703 296,748 129,711 Capital Projects Funds (992,364) 5,844,373 4,669,196 6,682,010 9,470,562 1,707,532 2,797,157 4,043,671 3,971,943 1,766,381 Total All Other Governmental Funds 5,905,214 9,736,450 8,522,880 11,350,675 12,381,291 12,259,197 6,161,849 6,713,429 7,606,901 7,164,919 Total Governmental Funds $ 11,563,934 $ 14,013,923 $ 12,048,859 $ 16,430,300 $ 24,632,435 $ 21,137,089 $ 15,327,235 $ 13,227,196 $ 12,089,179 $ 10,719,566

121


City of Rocky River, Ohio Changes in Fund Balance, Governmental Funds - Last Ten Fiscal Years Modified Accrual Basis of Accounting

122

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Revenues Property Taxes $ 5,221,797 $ 5,280,092 $ 5,251,769 $ 5,667,016 $ 6,235,604 $ 6,335,087 $ 7,041,339 $ 6,947,816 $ 7,080,115 $ 6,686,547 Municipal Income taxes 7,397,168 7,770,663 7,553,532 7,732,660 8,064,069 8,302,551 8,524,272 8,506,159 7,748,760 8,106,509 Other Local Taxes 218,398 195,854 195,006 278,970 171,013 185,144 190,258 244,218 163,144 269,969 Intergovernmental 5,549,611 7,464,551 4,351,557 6,823,149 6,168,682 5,223,478 5,067,103 5,900,572 6,285,727 4,683,905 Charges for Services 1,686,484 1,651,871 1,609,543 1,686,685 1,850,165 2,108,616 2,362,258 3,188,107 3,317,448 3,635,605 Fines, Fees, and Permits 2,739,133 2,908,634 2,739,144 2,857,860 3,292,766 2,946,563 2,795,898 3,348,071 3,357,804 3,405,319 Special Assessments 76,550 35,324 41,018 86,950 72,514 73,625 69,545 67,171 66,757 61,788 Investment Income 559,625 267,852 195,673 281,820 680,947 1,202,568 1,110,881 516,771 140,058 31,050 Rentals 59,013 86,692 98,771 107,664 109,372 102,925 130,683 94,133 104,387 104,047 Other 243,123 164,186 327,212 315,554 155,317 137,471 489,200 480,433 209,371 107,372 Total Revenues 23,750,902 25,825,719 22,363,225 25,838,328 26,800,449 26,618,028 27,781,437 29,293,451 28,473,571 27,092,111 Expenditures Current: Security of Persons and Property 6,619,901 7,001,113 7,309,763 7,585,135 7,680,206 8,158,722 8,659,138 8,876,601 9,246,320 8,985,847 Public Health and Welfare 1,043,279 1,015,068 1,081,332 918,244 1,063,225 1,107,247 1,258,586 1,260,324 1,173,737 1,298,805 Leisure Time Activities 2,482,386 2,415,412 352,892 2,433,953 2,661,923 2,888,877 3,522,149 3,818,666 3,641,297 3,387,478 Community Development 538,504 623,812 806,798 766,159 679,701 1,341,837 965,311 932,862 917,692 792,068 Basic Utility Services 1,246,307 1,365,575 1,485,120 1,339,321 1,437,860 1,482,518 1,601,443 1,639,711 2,056,568 3,387,129 Transportation 1,999,681 2,113,204 2,317,478 2,072,377 2,323,383 2,160,615 2,167,526 2,514,664 2,268,740 2,206,182 General Government 3,211,062 3,372,844 4,544,926 4,153,103 4,661,055 4,367,663 4,630,034 4,933,287 4,991,465 4,983,015 Capital Outlay 4,563,260 6,267,738 5,611,179 9,201,024 4,773,885 6,528,974 8,759,176 5,203,465 3,595,408 2,125,399 Debt Service Principal 360,984 372,070 462,037 3,356,817 1,022,756 1,148,732 1,154,751 1,100,814 1,116,923 1,138,080 Interest 372,076 355,077 439,169 485,503 968,887 933,167 905,917 877,823 848,319 815,274 Bond Issuance Costs 0 41,018 0 0 0 0 0 0 0 0 Total Expenditures 22,437,440 24,942,931 24,410,694 32,311,636 27,272,881 30,118,352 33,624,031 31,158,220 29,856,469 29,119,277 Excess of Revenues Over (Under) Expenditures 1,313,462 882,788 (2,047,469) (6,473,308) (472,432) (3,500,324) (5,842,594) (1,864,769) (1,382,898) (2,027,166) (continued)

City of Rocky River, Ohio Changes in Fund Balance, Governmental Funds - Last Ten Fiscal Years (continued) Modified Accrual Basis of Accounting

123

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Other Financing Sources (Uses): Proceeds from Issuance of Debt 0 3,700,000 0 10,840,000 8,400,000 0 0 0 228,754 646,016 Premium on General Obligation Debt 0 0 0 0 262,963 0 0 0 0 0 Proceeds from Inception of Capital Lease 0 0 0 0 0 0 0 0 0 0 Proceeds from Sale of Capital Assets 25,689 17,571 82,405 14,749 11,604 4,978 32,740 29,730 16,127 11,537 Transfers – In 6,771,983 7,054,559 5,370,297 7,549,959 2,795,000 9,070,623 5,115,000 7,650,000 5,487,764 4,471,000 Transfers – Out (6,676,026) (9,204,929) (5,370,297) (7,549,959) (2,795,000) (9,070,623) (5,115,000) (7,915,000) (5,487,764) (4,471,000) Total Other Financing Sources (Uses) 121,646 1,567,201 82,405 10,854,749 8,674,567 4,978 32,740 (235,270) 244,881 657,553 Net change in fund balances $ 1,435,108 $ 2,449,989 $ (1,965,064) $ 4,381,441 $ 8,202,135 $ (3,495,346) $ (5,809,854) $ (2,100,039) $ (1,138,017) $ (1,369,613) Debt Service as a Percentage of Noncapital Expenditures 4.52% 4.09% 4.05% 14.27% 8.92% 8.23% 8.11% 7.19% 7.18% 7.34%

City of Rocky River, Ohio Assessed and Estimated Actual Value of Taxable Property Last Ten Years

124

Real Property Public Utility Property Tax Year/ Estimated Estimated Collection Assessed Actual Assessed Actual Year Value Value (1) Value Value (1)

2001/2002 $ 571,695,000 $ 1,633,414,286 $ 12,675,450 $ 14,403,920

2002/2003 577,506,520 1,650,018,629 9,536,030 10,836,398

2003/2004 634,723,650 1,813,496,142 9,544,580 10,846,113

2004/2005 636,121,350 1,817,489,571 9,737,980 11,065,806

2005/2006 637,972,350 1,822,778,143 8,772,100 9,968,295

2006/2007 704,756,080 2,013,588,800 8,279,590 9,408,625

2007/2008 707,992,790 2,022,836,543 5,790,110 6,579,670

2008/2009 714,739,290 2,042,112,257 6,053,290 6,878,739

2009/2010 686,743,340 1,962,123,829 6,392,090 7,263,739

2010/2011 682,758,970 1,950,739,914 6,534,340 7,425,386

Source: Cuyahoga County, Ohio; County Auditor (1) This amount is calculated for 2010 based on the following percentages:

Real property is assessed at 35 percent of actual value.

Public utility property is assessed at 88 percent of actual value.

Tangible personal property is assessed at 25 percent of true value for capital assets and 23 percent of true value for inventory prior to 2006 tax year. Tangible personal is assessed at 18.75, 12.5, and 6.25 percent of true value for all property inventory for 2006, 2007, and 2008 respectively.

(2) Tax rates are per $1,000 of assessed value.

125

Tangible Personal Property Total Estimated Estimated Total Assessed Actual Assessed Actual Direct Value Value (1) Value Value (1) Ratio Rate (2)

$ 15,716,132 $ 62,864,528 $ 600,086,582 $ 1,710,682,734 35.08% $ 9.90

14,906,102 59,624,408 601,948,652 1,720,479,435 34.99 9.90

14,696,532 58,786,128 658,964,762 1,883,128,383 34.99 9.90

11,888,430 51,688,826 657,747,760 1,880,244,283 34.98 10.90

10,280,540 44,698,000 657,024,990 1,877,444,438 34.99 10.90

10,384,146 55,382,112 723,419,816 2,078,379,537 34.81 10.90

4,097,141 32,777,128 717,880,041 2,062,193,341 34.81 10.90

4,073,990 65,183,840 724,866,570 2,114,174,836 34.29 10.90

0 0 693,135,430 1,969,387,568 35.19 10.90

0 0 689,293,310 1,958,165,300 35.20 10.90

City of Rocky River, Ohio Property Tax Rates – Direct and Overlapping Governments (Per $1,000 of Assessed Valuation) Last Ten Years

126

City of Rocky River

Special Capital Debt Rocky River Special(1) General Revenue Projects Bond School and Cuyahoga Taxing Year Fund Funds Funds Service Total Library County Districts Total

2001 $ 6.30 $ 2.60 $ 1.00 $ 0 $ 9.90 $ 72.70 $ 11.72 $ 1.55 $ 95.87

2002 6.30 2.60 1.00 0 9.90 72.20 11.72 4.48 98.30

2003 6.30 2.60 1.00 0 9.90 76.70 13.52 4.48 104.60

2004 6.30 2.60 1.00 1.00 10.90 78.10 13.52 4.78 107.30

2005 6.30 2.60 1.00 1.00 10.90 83.10 13.52 4.78 112.30

2006 6.30 2.60 1.00 1.00 10.90 83.30 13.42 4.78 112.40

2007 6.30 2.60 1.00 1.00 10.90 83.20 13.42 4.78 112.30

2008 6.30 2.60 1.00 1.00 10.90 88.80 13.32 4.78 117.80

2009 6.30 2.60 1.00 1.00 10.90 88.80 13.32 4.78 117.80

2010 6.30 2.60 1.00 1.00 10.90 90.40 13.32 5.08 119.70

Source: Cuyahoga County, Ohio; County Auditor (1) Cleveland Metropolitan Park District, Cuyahoga County College District and Cleveland-Cuyahoga County Port Authority

127


City of Rocky River, Ohio Real Property Tax Levies and Collection Last Ten Years

128

Percent of Current Total Tax Current Collections to Delinquent Tax Year Levy Collections (1) Tax Levy Collections

2001 $ 5,960,601 $ 5,813,998 97.54 % $ 157,811

2002 6,366,351 5,872,530 92.24 160,298

2003 6,258,955 5,889,910 94.10 122,928

2004 6,568,175 6,170,368 93.94 139,194

2005 7,216,321 6,814,655 94.43 124,325

2006 7,232,129 6,847,235 94.68 134,097

2007 7,993,917 7,565,168 94.64 139,558

2008 8,054,197 7,555,361 93.81 211,861

2009 7,867,118 7,834,168 99.58 177,726

2010 7,810,832 7,320,406 93.72 157,753

Source: Cuyahoga County, Ohio; County Auditor

(1) Includes homestead/rollback taxes assessed locally but distributed through the Ohio Department of Taxation and reported as intergovernmental/grants and entitlements revenue.

Note: The County does not identify delinquent collections by the year for which the tax was levied.

129

Percent Percent of of Total Outstanding Delinquent Total Tax Collections Delinquent Taxes to Collections To Tax Levy Taxes Tax Levy

$ 5,971,809 100.19% $ 267,631 4.49 %

6,032,828 94.76 195,557 3.07

6,012,838 96.07 248,027 3.96

6,309,562 96.06 292,542 4.45

6,938,980 96.16 286,098 3.96

6,981,332 96.53 315,249 4.36

7,704,725 96.38 345,085 4.32

7,767,222 96.44 267,880 3.33

8,011,894 101.84 254,902 3.24

7,478,159 95.74 253,220 3.23

City of Rocky River, Ohio Principal Taxpayers: Real and Tangible Personal Property Tax As of December 31, 2010 and December 31, 2001

130

2010 Real and Tangible

Personal Property Assessed Percent of Total Taxpayer Value Assessed Value Westwood Town Center $ 7,274,720 1.06% Normandy Association, LTD. 4,854,790 0.70 Westgate Mall, LLC 4,608,070 0.67 Cleveland Illuminating Company 4,431,800 0.64 Beachcliff Properties, LP 4,161,340 0.60 Presidential Apartments, LTD. 3,992,940 0.58 Westwood Country Club, Co. 3,262,770 0.47 Linden Apartment Company 2,548,600 0.37 Gross Management, Inc. 2,500,790 0.36 SRK Perrysburg Association, LLC 2,456,580 0.36

Totals $ 40,092,400 5.81% Total City Assessed Valuation $ 689,293,310 2001 Real and Tangible

Personal Property Assessed Percent of Total Taxpayer Value Assessed Value Westwood Town Center $ 5,340,310 0.89% Cleveland Illuminating Company 4,735,790 0.79 Normandy Association, LTD. 4,649,260 0.77 Rockport Associates Company 4,283,370 0.71 Presidential Apartments, LTD. 3,927,840 0.65 Ohio Bell Telephone Company 3,216,590 0.54 Gross Management, Inc. 2,964,820 0.49 Linden Apartment Company 2,744,460 0.46 Missouri River Corporation 2,239,830 0.37 Harbor Court 1,999,310 0.33

Totals $ 36,101,580 6.00% Total City Assessed Valuation $ 600,086,582


City of Rocky River, Ohio Ratio of Outstanding Debt by Type Last Ten Years

131

Governmental Activities Business-Type General Special Total Percentage Fiscal Obligation Assessment OPWC Capital OWDA Primary of Personal Per

Year Bonds Bonds Loan Lease Loan Government Income (1) Capita (1) 2001 $ 3,835,000 $ 895,000 $ 0 $ 3,130 $ 329,386 $ 5,062,516 0.70 % $ 244.15 2002 7,215,000 865,000 0 1,117 328,239 8,409,356 1.17 405.56 2003 6,810,000 830,000 0 0 316,234 7,956,234 1.11 383.71 2004 14,355,000 790,000 0 0 303,666 15,448,666 2.15 745.05 2005 21,795,000 750,000 0 0 290,508 22,835,508 3.18 1,101.30 2006 20,710,000 710,000 0 0 276,733 21,696,733 3.02 1,046.38 2007 19,620,000 670,000 0 0 262,310 20,552,310 2.86 991.19 2008 18,585,000 630,000 0 0 247,210 19,463,210 2.71 938.62 2009 17,535,000 590,000 288,754 0 231,400 18,585,154 2.59 896.32 2010 16,465,000 550,000 874,770 0 214,850 18,104,620 2.58 895.69 Note: Details regarding the City’s outstanding debt can be found in the notes to the financial statements. (1) See the schedule of Demographic and Economic Statistics on page 138 for personal income and population data.

City of Rocky River, Ohio Special Assessment Levies, Collections and Coverage Last Ten Years

132

Current Current Ratio of Assessments Assessments Collections Debt Service Year Due Collected(1) To Amount Due Principal Interest Coverage

2001 $ 97,650 $ 76,550 78.39 % $ 30,000 $ 51,559 0.94

2002 87,278 62,574 71.70 30,000 45,338 0.73

2003 95,383 69,497 72.86 35,000 43,888 1.42

2004 98,183 94,407 96.15 40,000 42,201 1.14

2005 102,359 96,101 93.88 40,000 40,263 1.20

2006 133,426 112,059 83.99 40,000 38,313 1.43

2007 165,931 123,640 74.51 40,000 36,363 1.62

2008 112,980 104,878 92.83 40,000 34,413 1.41

2009 109,663 101,345 92.42 40,000 32,425 1.40

2010 158,600 141,903 89.47 40,000 30,438 2.01


(1) Collections made by Cuyahoga County Auditor only (includes principal and interest)

City of Rocky River, Ohio Ratio of Net General Bonded Debt to Assessed Value and Net General Bonded Debt per Capita Last Ten Years

133

Net General Ratio of Net General Net General Obligation Assessed Bonded Debt to Bonded Debt Year Population (1) Bonded Debt Value Assessed Value Per Capita

2001 20,735 $ 8,920,585 $ 600,086,582 1.49 % $ 430.22

2002 20,735 7,100,585 601,948,652 1.18 342.44

2003 20,735 6,695,585 658,964,762 1.02 322.91

2004 20,735 14,228,490 657,747,760 2.16 686.21

2005 20,735 21,938,364 657,024,990 3.34 1,058.04

2006 20,735 20,760,982 723,419,816 2.87 1,001.25

2007 20,735 19,678,785 717,880,041 2.74 949.06

2008 20,735 18,537,073 724,866,570 2.56 894.00

2009 20,735 17,821,424 693,135,430 2.57 859.49

2010 20,213 17,532,043 689,293,310 2.54 867.36

(1) Sources: U.S. Bureau of the Census. (a) 2010 Federal Census (b) 2000 Federal Census

City of Rocky River, Ohio Computation of Legal Debt Margin Last Ten Year

134

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Assessed Valuation $ 600,086,582 $ 601,948,652 $ 658,964,762 $ 657,747,760 $ 657,024,990 $ 723,419,816 $ 717,880,041 $ 724,866,570 $ 693,135,430 $ 689,293,310 Debt Limit - 10.5% of Assessed Valuation $ 63,009,091 $ 63,204,608 $ 69,191,300 $ 69,063,515 $ 68,987,624 $ 75,959,081 $ 75,377,404 $ 76,110,990 $ 72,779,220 $ 72,375,798 Gross Indebtedness 10,265,701 8,408,239 7,956,234 15,728,195 23,269,111 22,107,515 20,940,271 19,827,350 18,927,473 18,424,118 Less: Debt Outside Limitation (1,230,701) (1,193,239) (1,146,234) (1,093,666) (1,040,508) (986,733) (932,310) (877,210) (821,400) (764,850) Less: Amount Available In Debt Service Funds (114,415) (114,415) (114,415) (406,039) (290,239) (359,800) (329,176) (413,067) (284,649) (127,225) Net Debt Within 10.5% Limitation 8,920,585 7,100,585 6,695,585 14,228,490 21,938,364 20,760,982 19,678,785 18,537,073 17,821,424 17,532,043 Legal Debt Margin $ 54,088,506 $ 56,104,023 $ 62,495,715 $ 54,835,025 $ 47,049,260 $ 55,198,099 $ 55,698,619 $ 57,573,917 $ 54,957,796 $ 54,843,755 Debt Limit - 5.5% of Assessed Unvoted Value $ 33,004,762 $ 33,107,176 $ 36,243,062 $ 36,176,127 $ 36,136,374 $ 39,788,090 $ 39,483,402 $ 39,867,661 $ 38,122,449 $ 37,911,132 Gross Indebtedness Authorized by Council 10,265,701 8,408,239 7,956,234 15,728,195 23,269,111 22,107,515 20,940,271 19,827,350 18,927,473 18,424,118 Less: Debt Outside Limitation (1,230,701) (1,193,239) (1,146,234) (1,093,666) (9,200,508) (8,836,733) (8,467,310) (8,087,210) (7,696,400) (7,294,850) Less: Amount Available in Debt Service Funds Related to Unvoted Debt (114,415) (114,415) (114,415) (406,039) (118,102) (131,040) (225,486) (329,728) (194,020) (76,937) Net Debt Within 5.5% Limitation 8,920,585 7,100,585 6,695,585 14,228,490 13,950,501 13,139,742 12,247,475 11,410,412 11,037,053 11,052,331 Unvoted Debt Margin $ 24,084,177 $ 26,006,591 $ 29,547,477 $ 21,947,637 $ 22,185,873 $ 26,648,348 $ 27,235,927 $ 28,457,249 $ 27,085,396 $ 26,858,801

Source: Cuyahoga County, Ohio; County Auditor, and City Financial records

City of Rocky River, Ohio Computation of Direct and Overlapping General Obligation Bonded Debt December 31, 2010

135

Amount General Percentage Applicable Obligation Debt Applicable to City of Outstanding to City (1) Rocky River Direct:

City of Rocky River $ 16,784,498 100.00% $ 16,784,498

Overlapping:

Cuyahoga County 319,446,948 2.31 7,379,224

Greater Cleveland Regional Transit Authority 152,760,000 2.31 3,528,756

Rocky River School District 54,768,747 97.07 53,164,023

Total Overlapping 526,975,695 64,072,003

Total $ 543,760,193 $ 80,856,501

Source: Cuyahoga County, Ohio; County Auditor (1) Percentages were determined by dividing the assessed valuation of the political subdivision located within the boundaries of the City by the total assessed valuation of the political subdivision.

City of Rocky River, Ohio Ratio of Annual Debt Service Expenditures For General Bonded Debt to Total Governmental Expenditures Last Ten Years

136

Ratio of Debt Service General To Total Debt Governmental Governmental Year Service Expenditures Expenditures

2001 $ 533,830 $ 22,619,372 2.36 %

2002 527,090 24,942,931 2.11

2003 769,349 24,410,694 3.15

2004 3,842,320 32,065,983 12.00

2005 1,991,643 27,272,881 7.30

2006 2,081,899 30,118,352 6.91

2007 2,060,668 33,624,031 6.13

2008 1,978,637 31,158,220 6.35

2009 1,965,242 29,856,469 6.56

2010 1,953,354 29,119,277 6.83

Source: City Financial Records

City of Rocky River, Ohio Principal Employers Current Year and Nine Years Ago

137

2010 Percentage of Total City Employer Employees Employment 1 City of Rocky River 729 5.6% 2 Rocky River Board of Education 623 4.8 3 Westwood Country Club Co. 240 1.8 4 Marc Glassman Inc 239 1.8 5 Cleveland Yacht Club Inc. 237 1.8 6 Magnificat High School 199 1.5 7 Heinens Inc. 195 1.5 8 Cuyahoga County SAW Inc. 190 1.5 9 CRS Marketing Services, Inc. 159 1.2 10 Riser Foods Co. 143 1.1 Total 2,954 22.6% Total City Employment 13,085 2001 Percentage of Total City Employer Employees Employment 1 Rocky River City School District NA NA 2 City of Rocky River NA NA 3 Cuyahoga County Auditor NA NA 4 Heinen’s Inc. NA NA 5 Magnificat High School NA NA 6 McDonald & Company Securities NA NA 7 North American Benefits Network NA NA 8 Normandy LTD. NA NA 9 Premier Physicians Group NA NA 10 Riser Foods NA NA Total NA NA Total City Employment NA Source: Central Collection Agency (CCA). Total City employment based upon estimate from the Central Collection Agency number of W-2’s filed. NA - Information is not available

City of Rocky River, Ohio Demographic and Economic Statistics Last Ten Years

138

Per Capita Median Total Personal Personal Household School Unemployment Year Population (1) Income (2) Income (1) Income (1) Enrollment (3) Cuyahoga County

2001 20,735 b $ 718,737,305 $ 34,663 $ 51,636 2,467 4.60%

2002 20,735 b 718,737,305 34,663 51,636 2,493 6.60

2003 20,735 b 718,737,305 34,663 51,636 2,575 6.20

2004 20,735 b 718,737,305 34,663 51,636 2,598 6.20

2005 20,735 b 718,737,305 34,663 51,636 2,623 6.50

2006 20,735 b 718,737,305 34,663 51,636 2,640 5.60

2007 20,735 b 718,737,305 34,663 51,636 2,696 6.10

2008 20,735 b 718,737,305 34,663 51,636 2,686 7.10

2009 20,735 b 718,737,305 34,663 51,636 2,681 8.90

2010 20,213 a 700,643,219 34,663 51,636 2,644 8.60

(1) Sources: U.S. Bureau of the Census. (a) 2010 Federal Census (b) 2000 Federal Census Note: 2010 Personal Income and Median Household Income data not available (2) Computation of per capita personal income multiplied by population.

(3) Rocky River Board of Education

City of Rocky River, Ohio Property Value and Construction Last Ten Years

139

Property Value (1) Residential (2) Commercial (2) Number Number Year Commercial Residential Total of Units Value of Units Value

2001 $ 259,539,257 $ 1,373,875,029 $ 1,633,414,286 16 $ 6,646,000 5 $ 6,469,000

2002 265,627,200 1,384,391,429 1,650,018,629 16 5,190,000 1 9,570,917

2003 283,572,742 1,529,923,400 1,813,496,142 18 6,195,000 3 6,843,800

2004 284,197,186 1,533,292,385 1,817,489,571 28 9,652,000 3 3,013,000

2005 280,632,371 1,542,145,771 1,822,778,142 31 11,465,275 1 5,500,000

2006 296,426,314 1,717,162,486 2,013,588,800 25 6,025,000 2 9,929,000

2007 296,814,600 1,726,021,943 2,022,836,543 2 362,000 2 14,716,134

2008 308,154,600 1,733,957,657 2,042,112,257 1 1,500,000 3 1,670,000

2009 320,690,028 1,641,433,800 1,962,123,828 6 4,034,131 1 850,000

2010 308,753,342 1,641,986,571 1,950,739,913 5 3,085,000 2 428,900

Sources: Cuyahoga County, Ohio - County Auditor; City Building Department

(1) Represents total estimated market value of real property, obtained from the County Auditor. (2) Number of units (single and multi-family) include new construction only. Obtained information from City Building Department.

City of Rocky River, Ohio Full-time Employees by Function/Program Last Nine Years

140

2002 2003 2004 2005 2006 2007 2008 2009 2010 Function/Program

General Government: Mayor 1 1 1 1 1 1 1 1 1 Finance 3 4 4 3 3 3 3 3 3 Human Resources 0 0 0 1 1 1 1 1 1 Municipal Courts 27 27 27 27 27 25 26 24 29 Engineering 3 3 3 0 0 0 0 0 0 Building 4 4 4 6 6 6 6 6 6 Building Maintenance 5 5 5 5 5 5 5 5 5 Security of Persons and Property: Safety Service Director 2 2 2 2 2 1 2 2 2 Fire 29 30 30 30 30 30 30 30 30 Police 37 37 37 38 38 38 38 38 38 Traffic Signal 4 4 4 4 4 4 4 4 4 Transportation: Equipment Repair and Garage 7 7 7 7 7 8 8 8 7 Street Repair and Maintenance 13 13 13 13 12 14 13 12 10 Community Development: Community Development 2 2 1 1 1 1 1 1 1 Leisure Time Activities: Parks 4 4 4 4 4 4 4 4 4 Recreation Center 15 15 15 15 15 17 16 17 16 Public Health: Office on Aging 8 8 8 8 8 8 8 8 8 Basic Utilities Services: Refuse and Recycling 15 15 15 15 15 15 15 15 16

Total Governmental Activities: 179 181 180 180 179 181 181 179 181

Sanitary Sewer 10 10 10 10 10 10 9 9 9 Total Business-Type Activities: 10 10 10 10 10 10 9 9 9 Total Primary Government: 189 191 190 190 189 191 190 188 190

Source: City Records Note: Information prior to 2002 is not available.

City of Rocky River, Ohio Operating Indicators by Function/Program Last Nine Years

141

2002 2003 2004 2005 2006 2007 2008 2009 2010

General Government: Building Department: New Single Family Home Permits 10 8 12 14 11 2 1 4 5 Commercial Building/Structures New 1 3 3 1 2 2 2 1 2 Additions 20 22 17 27 32 19 22 13 26 Increase in Dwelling Units 16 18 28 31 25 2 0 17 13 Total Receipts – Building Permits $ 149,959 $ 156,126 $ 192,512 $ 219,896 $ 245,872 $ 229,087 $ 221,535 $ 220,606 $ 258,561 Council: Number of Ordinances/Resolutions 210 235 183 188 163 142 144 106 58 Municipal Court: Jurisdiction Population 120,226 120,226 120,226 120,226 120,226 120,226 120,226 120,226 120,226 Cases Filed: Criminal/Traffic 32,422 33,774 28,825 32,825 25,536 24,778 25,536 23,592 23,574 Civil/Small Claims 2,347 2,508 2,629 2,702 2,887 3,208 2,702 3,887 3,106 Security of Persons and Property: Fire Protection: Emergency Responses: Building Fire Calls NA 8 20 13 13 22 13 29 23 Emergency Medical Care 2,035 1,984 1,986 2,032 1,965 2,070 1,956 1,936 2,008 System Tests Witnessed: Commercial Kitchen NA 97 103 84 40 18 15 14 NA Sprinkler NA 44 55 40 11 5 9 13 NA Fire Alarm NA 83 94 30 30 5 18 25 NA Standpipe NA 3 5 2 2 3 1 1 NA General Inspections for Licensure NA 22 37 17 32 20 62 58 52 (continued)

City of Rocky River, Ohio Operating Indicators by Function/Program (continued) Last Nine Years

142

2002 2003 2004 2005 2006 2007 2008 2009 2010 Police Protection: Motor Vehicle Accidents 433 318 389 377 313 335 363 336 374 BAC Licensed Operators 23 23 24 24 23 23 23 22 24 Community Diversion Cases 131 171 157 266 213 216 192 240 140 Marine Patrol Boat Hours 615 521 567 531 534 510 520 609 922 Total Prisoners 1,169 1,244 1,107 1,080 1,053 1,097 930 972 909 Miles Patrolled 293,924 247,380 330,032 265,671 239,422 278,363 272,326 256,645 250,625 Transportation: Safety Service: Snowfall in Inches [1] 46.0 95.7 91.2 117.9 50.6 76.5 77.2 79.7 63.1 Road Salt Purchased (tons) 800 5,700 4,000 5,600 3,200 4,500 4,800 4,000 4,800 Cold Patch Purchased (tons) 34 36 29 74 25 64 NA 25 NA Trees Planted 111 95 109 214 351 224 270 89 92 Trees Removed 79 52 78 117 43 64 100 47 43 Leisure Time Activities: Recreation Center: Summer Camp – Recreation NA 525 624 590 557 573 532 476 450 Summer Camp – Sports NA 632 529 474 542 626 572 453 518 Concert Attendance 2,000 1,500 2,200 2,800 2,400 3,300 1,850 3,500 NA Father-Daughter Dance Couples NA NA 40 39 34 35 42 19 NA Outdoor Pool Attendance 32,658 28,931 25,651 60,273 51,376 56,518 43,955 32,721 46,697 Civic Center Daily Member Log-ins[2] NA NA NA NA NA 15,394 142,017 150,106 168,020 New Year’s Eve Skate Attendance NA 450 350 358 450 490 350 350 NA Basic Utilities Service: Refuse Collection: Refuse Truck Collections (tons) 8,382 8,799 8,761 8,546 8,219 7,739 9,823 9,093 8,853 Blue Bag Collections (tons) 300 293 278 272 284 295 255 337 375 Leaf Collections (tons) 1,930 1,177 NA 1,134 1,384 1,666 1,481 1,287 1,288 Paper Collections (tons) 552 549 493 438 380 308 240 195 155 Cardboard Collections (tons) 148 157 177 167 161 158 183 183 173 (continued)

City of Rocky River, Ohio Operating Indicators by Function/Program (continued) Last Nine Years

143

2002 2003 2004 2005 2006 2007 2008 2009 2010

Public Health Services: Senior Center: Volunteers 189 176 155 148 154 147 150 150 158 Volunteer Hours 10,852 10,630 10,150 10,280 11,676 12,647 12,910 12,910 15,352 Senior Transportation Trips 8,402 8,713 8,549 9,551 7,932 7,308 7,958 8,578 8,178 Lunches Served 10,752 10,255 11,443 12,985 13,244 14,016 14,778 15,825 16,612 Gift Shop Sales $ 47,581 $ 50,865 $ 48,299 $ 50,904 $ 56,520 $ 54,421 $ 57,662 $ 52,169 $ 63,152 90 and Over Luncheon Attendees NA NA NA NA 130 166 160 250 186 Flu and Pneumonia shots 292 378 509 872 869 691 706 572 436 Sanitary Sewer: Quantity and Strength Percent of Wastewater Treatment Plant 28.35 28.35 28.35 28.35 29.53 29.53 29.40 29.40 25.43 Source: City Records [1] – National Weather Service – Cleveland Hopkins International Airport [2] – The Civic Center opened in September 2007 NA – Information is not available

City of Rocky River, Ohio Capital Asset Statistics by Function/Program Last Nine Years

144

2002 2003 2004 2005 2006 2007 2008 2009 2010

General Government: Other Departmental Vehicles 9 9 9 10 10 10 10 10 10 Square Footage of Building 44,370 44,370 44,370 44,370 44,370 44,370 44,370 44,370 44,370 Miles of Storm Sewer 90 90 90 90 90 90 90 90 90 Security of Persons and Property: Fire Protection: Number of Stations 1 1 1 1 1 1 1 1 1 Number of Vehicles 9 9 9 9 9 10 10 10 10 Square Footage of Fire Station 10,088 10,088 10,088 10,088 10,088 10,088 10,088 10,088 10,088 Number of Fire Hydrants 1,093 1,093 1,093 1,093 993 1,003 1,003 1,003 1,041 Police Protection: Number of Stations 1 1 1 1 1 1 1 1 1 Number of Vehicles 24 24 24 24 24 25 25 25 25 Marine Patrol Boat 1 1 1 1 1 1 1 1 1 Canine Unit(s) 1 1 1 2 2 2 2 2 2 Square Footage of Police Station 9,672 9,672 9,672 9,672 9,672 9,672 9,672 9,672 9,672 Number of Street Lights 1,813 1,813 1,813 1,813 1,813 1,813 1,813 1,813 1,813 Transportation: Number of Vehicles 31 31 31 31 31 31 31 31 31 Square Footage of Service Building 52,198 52,198 52,198 52,198 52,198 52,198 52,198 52,198 52,198 Miles of Streets 60.49 60.49 60.49 60.49 60.49 60.49 60.49 60.49 60.49 Leisure Time Activities: Recreation and Culture: Number of Parks 8 8 8 9 9 9 9 9 9 Acres of Parks 105 105 105 106 106 106 106 106 106 Number of Vehicles 10 10 10 10 10 10 10 10 10 Square Footage of Recreation Facilities 42,379 42,379 42,379 42,379 42,379 84,379 84,379 84,379 84,379 Miles of Shoreline 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 (continued)

City of Rocky River, Ohio Capital Asset Statistics by Function/Program (continued) Last Nine Years

145

2002 2003 2004 2005 2006 2007 2008 2009 2010 Basic Utilities Service: Refuse Collection: Refuse Vehicles 24 24 24 24 24 24 24 24 24 Transit Scooters 20 20 20 20 20 20 20 19 19 Transfer Station 1 1 1 1 1 1 1 1 1 Public Health Services: Senior Transportation: Number of Vehicles 6 6 6 6 6 6 6 6 5 Square Footage of Senior Center 20,012 20,012 20,012 20,012 20,012 20,012 20,012 20,012 20,012 Sewers: Miles of Sanitary Sewers 90 90 90 90 90 90 90 90 90 Number of Vehicles 8 8 8 8 8 8 8 8 8 Number of Sanitary Sewer Accounts 7,080 7,087 7,087 7,094 7,091 7,018 7,091 7,038 7,038 Source: City Records Information prior to 2002 is not available

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City of Rocky River Cuyahoga County, Ohio


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City of Rocky River, Ohio For The Year Ended December 31, 2010 Table of Contents

Title Page Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................................... 1-2 Schedule of Findings............................................................................................................................. 3 Schedule of Prior Year Findings ........................................................................................................... 4 Responses to Findings Associated with Audit Conducted in Accordance with Government Auditing Standards for the Year Ended December 31, 2010....................................................................................................................................................... 5

1

Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance With Government Auditing Standards Members of the City Council Rocky River, Ohio We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Rocky River, Ohio (the “City”), as of and for the year ended December 31, 2010, which collectively comprise the City’s basic financial statements and have issued our report thereon dated July 7, 2011, wherein we noted the City adopted GASB Statement No.’s. 51, 53, and 58 as disclosed in Note 3. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the City’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we indentified certain deficiencies in internal control over financial reporting, described in the accompanying schedule of findings that we consider to be significant deficiencies in internal control over financial reporting: 2010-1. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Members of the City Council Rocky River, Ohio

2

Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government auditing Standards. We noted certain matters that we reported to management of the City in a separate letter dated July 7, 2011. The City’s response to the finding identified in our audit is described in the accompanying schedule of findings. We did not audit the City’s response, and accordingly, we express no opinion on it. This report is intended solely for the information and use of management, City Council, the Audit Committee, others within the entity, and the Auditor of State’s Office and is not intended to be and should not be used by anyone other than these specified parties.

Cleveland, Ohio July 7, 2011

City of Rocky River, Ohio Schedule of Findings For the Year Ended December 31, 2010

3

1. Summary of Auditors’ Results

Type of Financial Statement Opinion Unqualified

Were there any significant deficiencies reported at the financial statement level (GAGAS)?

Yes

Were there any material weaknesses reported at the financial statement level (GAGAS)?

No

Was there any material noncompliance reported at the financial statement level (GAGAS)?

No

2. Findings Related to the Financial Statements Required To Be Reported in Accordance With GAGAS

2010-1 – Significant Deficiency A capital asset management system is a system of methods, policies, and procedures that address the acquisition, use, control, protection, maintenance, and disposal of assets. Accurate accounting for assets is required for the correct and complete presentation of capital asset financial information. While reviewing the City’s procedures for maintaining capital asset records, we noted the following:

The City maintains a listing of certain movable equipment and vehicles; however, the City does not maintain a complete detailed list of all capital assets, including the year of acquisition, the original or estimated historical cost of each capital asset, the serial number or tag number, and if applicable, accumulated depreciation and current depreciation for each capital asset or asset class. The City has installed a CMI capital asset module (FASX) onto the City’s server; however, not all of the City’s capital assets are recorded in the system.

The City does not have a written capital asset policy.

Based on the presentation in Note 9, vehicles for the business-type activities will be fully

depreciated in less than two years. AICPA Audit and Accounting Guide: State and Local Governments – March 2010 paragraph 7.28 provides that in estimating useful life for calculating depreciation governments should consider an asset’s present condition and how long it is expected to meet service demands. On an annual basis, the City should analyze the useful life used for its assets and adjust them if necessary. A capital asset system would assist in performing this function.

We recommend the City develop a written capital asset policy and record all capital assets into the CMI capital asset module to properly account for the acquisition date, description of the asset, identification or tag number, fund and function the asset is assigned to, original or estimated historical cost, accumulated depreciation, current year depreciation expense, salvage value, and if applicable, the carrying value of each asset.

City of Rocky River, Ohio Schedule of Prior Year Findings For the Year Ended December 31, 2010

4

Finding No.

Finding Summary

Fully Corrected

Explanation

2009-1 Capital asset management system No Reissued as 2010-1.

City of Rocky River, Ohio

21012 Hilliard Blvd Rocky River, Ohio 44116

(440) 331-0600

Responses To Findings Associated With Audit Conducted In Accordance With Government Auditing Standards


5

Finding Number

Planned Corrective

Action

Anticipated Completion

Date

Responsible Contact Person

2010-1

The City will load all assets into the CMI, Inc. system.

N/A

Mike Thomas, Finance Director

88 East Broad Street, Fifth Floor, Columbus, Ohio 43215‐3506 Phone: 614‐466‐4514 or 800‐282‐0370 Fax: 614‐466‐4490

www.auditor.state.oh.us

CITY OF ROCKY RIVER

CUYAHOGA COUNTY

CLERK’S CERTIFICATION This is a true and correct copy of the report which is required to be filed in the Office of the Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.

CLERK OF THE BUREAU CERTIFIED SEPTEMBER 13, 2011

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